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Normally, Europeans feel pretty smug on environmental matters compared with the US, but proposed EU eco fines for car makers have a direct US precedent
News of EU fines for car manufacturers whose vehicles' average CO2 emissions don't hit 130g/km or below by 2012 has sent shock waves through the European industry and sparked worries of a price hike for business users. The US market, however, has had a similar scheme of punishment - based on a vehicle's average fuel economy - for years.
Yes, there's a whole bunch of caveats for big trucks and 4x4s that make little eco sense and have the whiff of US job protectionism but, nonetheless, six European vehicle manufacturers have just been fined a total of $40 million (£20m) for exceeding Corporate Average Fuel Economy (CAFE) standards during the 2006 model year. DaimlerChrysler alone has been ordered to pay $30 million (£15m), BMW $5.1m, Porsche $4.6m, Maserati $1.4m, VW $1m and Ferrari $842,000. So far only European car makers have ever had to pay the fines - partly because the sort of European cars imported tend to be at the luxury, heavier, sportier and more powerful end of the market.
The fines are calculated at $5.50 for every tenth of a mile under the 27.5 miles per (smaller) US gallon 2007 target for cars, multiplied by the number of vehicles sold.
Guess how the proposed new CO2 fines are to be calculated? The EU suggests 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. Sound familiar?
And, as many of you may know, the US has much more stringent air-quality rules for non-CO2 emissions associated with local air pollution and carcinogenic properties such as NOx, hydrocarbons and particulates. That's why almost no modern diesel engines - seen as very eco-friendly in Europe in terms of CO2 - can yet be sold in the US (although the next generation of Euro diesel engines will change that).
The biggest difference, of course, is that the EU proposals on CO2 standards for 2012 correlate to a far higher average mpg. The EU's original 120g/km target is considered to equate to about 62.8mpg for diesel cars and 56.5mpg for petrol. Even at the 130g/km figure now touted, the equivalent mpg aims will still be very high - as an average. And, notwithstanding the size difference between US and European gallons, there is a massive difference in the EU's ambition and correspondingly massive fines in the offing if car makers selling in Europe fail to ratchet down CO2 sufficiently.
Of course, there are also caveats in the EU legislation. Higher-emitting manufacturers will be able to pool their CO2 with lower-emitting makers to get under the bar, and exemptions exist for small independent marques - such as Aston Martin - who sell fewer than 10,000 cars a year. But the EU's fines could still easily run into billions of euros for some manufacturers, based on their slow progress to the latest 2006 emissions figures. The EU's argument is that it set the fines deliberately high to promote technological change rather than generate a revenue stream for itself.
There's still some way to go before the draft legislation becomes law - further heated debate between eco lobbyists and car makers could take a few years - but, given the US precedent and the EU's new legal focus, it seems likely something along these lines will become law in time for 2012.
For once, it seems, Europe is following the US on eco matters - at least in method if not in depth of intent.
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