Vehicle manufacturers might have to do some serious re-jiggering of their cars or pay up if they want to sell to European drivers.
On Wednesday, the European Commission proposed a law that would require the auto industry to cut carbon-dioxide emissions spewing from the tailpipes of new cars by 19 percent by 2012. Road transportation contributes to about one-fifth of Europe’s total carbon-dioxide emissions.
"This proposal demonstrates that the European Union is committed to being a world leader in cutting CO2 emissions and the development of a low-carbon economy," said the commission’s president, José Manuel Barroso, in a written statement.
The EU isn’t the only region of the world looking to lower its transportation emissions. Also on Wednesday, U.S. President George W. Bush signed into law an energy bill that strengthens fuel-economy standards for the first time in 30 years (see President Signs Energy Bill).
The European proposal would reduce the amount of the greenhouse gas from new passenger cars from around 160 grams per kilometer (5.6 ounces per 0.62 miles) to 130 grams per kilometer (4.6 ounces per 0.62 miles).
The emissions would be measured by averaging emissions from manufacturers’ whole fleets.
If that doesn’t work, the plan allows for manufacturers to pool their fleets together in order to meet emissions targets -- an addendum that should help bring small car-makers some additional revenue.
Companies that make fewer than 10,000 vehicles per year are expected to apply for an individualized target.
But for larger auto manufacturers, failure to meet emission goals would result in fines starting at €20 ($28.83) per gram per kilometer, multiplied by the number of cars sold. And by 2015, the fine would rise to €95 ($136.95).
Despite the potential clampdown, Barroso said the proposal aims to safeguard auto-industry competitiveness.
But some automakers and politicians couldn’t agree less.
"The proposal is very disappointing," said Sergio Marchionne, president of the European Automobile Manufacturers Association, in a written statement.
As the association sees it, the proposal could reduce the European auto sector’s competitive edge and bog it down with costs disproportionate to the environmental gains.
German Chancellor Angela Merkel also chimed in, saying the plan was "not economically favorable" and that it would burden Germany and its car-makers disproportionately, according to Reuters.
Germany is home to high-end vehicle makers such as BMW and Mercedes-Benz, whose powerful cars also come with higher emissions.