Car fumes: do not panic (yet…)

Implications: The European Commission plans to propose measures to bring emissions of greenhouse gases from the average new car down to 120g of CO2 per kilometer by 2012 - 25% below the 2005 level of 162g/km.

Final provisions will depend on a host of complex negotiations, but the overall trend is clear:  the competitive advantage for car manufacturers to offer more efficient engines is likely to become ever more pronounced in the years ahead.

Analysis: The European Commission is to propose measures to bring emissions of greenhouse gases from the average new car down to 120g of CO2 per kilometer by 2012 - 25% below the 2005 level of 162g/km. Car makers would be be responsible for getting emissions down to 130g/km through better car technology, whereas increased use of biofuels, better tires & measures to foster smoother driving would save the extra 10g/km.

These proposals are part of the Commission’s opening gambit; this is early days in the legislative process, so that the final provisions will depend on a host of complex negotiations.

Yet, as for other measures under the EU comprehensive energy & climate change strategy, there is no mistaking the European authorities’ determination to implement effectual policies that will have a real impact on overall emissions.

On top of EU legislation, individual member states are considering fiscal measures that will further weigh on fuel-guzzlers.

The overall direction is thus clear:  the competitive advantage for car manufacturers to offer more efficient engines is likely to become even more pronounced in the years ahead.