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It looks like the EU's finally seen reason when it comes to its proposed fines for carmakers that couldn't reach a 130g/km average by 2012
Back in late 2007 the EU proposed huge fines for carmakers that couldn't reach a 130g/km average by 2012m which equated to a 20 Euro (£14) 'penalty premium' for every g/km over the agreed 130g/km average multiplied by the number of vehicles sold in 2012 rising each year to 95 euros (£68) per g/km by 2015.
Yes, higher-emitting carmakers could pool their CO2 with lower emitters to get under the bar, but the EU's proposed fines could still have easily run into billions of Euros for some carmakers. At the time, even BMW -with its CO2-reducing 'Efficient Dynamics' programme - branded the regulation "unrealistic".
Back then, the EU argued the fines were set deliberately high to promote technological change rather than a revenue stream, but it seems the body has come to realise the timeframe for change was just too short. Or maybe it wanted to aim high knowing its lofty plans would inevitably be chipped away through negotiation.
Either way, the European Parliament's widely respected industry, research and energy committee approved compromise agreements in early September that would give carmakers from 2012-2015 to become fully compliant with the 130g/km limit.
The amendments, tabled by a German Euro Parliament member Werner Langen, no doubt with job protection at Porsche, Mercedes, Audi and BMW in the back of his mind, also suggested lower fines for firms that fail to meet the standard. He proposed a 40 Euro flat fine with the committee adding that the Commission's proposed penalties were "far higher than any conceivable trade prices for CO2 certificates in the industry and energy sectors". He continued: "Penalties should not have the effect of weakening industry's ability to innovate."
The committee also wants to give incentives to carmakers that produce cars with very low emissions. Those making sub-70g/km vehicles would be allowed to count them as five cars until 2016 for the purposes of working out CO2 averages.
The European Parliament is looking at finalising the CO2 regulations on 22 October with a new rule in effect by early 2009.
If all goes to plan UK business users should benefit as carmakers face more realistic and less costly fines that can be ploughed into bringing exciting lower emission cars such as GM's Volt and Honda's Insight to the market earlier. Hopefully common sense and reality has prevailed.
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