---

New Cars (Emissions Targets)

The Government are today publishing a consultation document and accompanying impact, assessment on the European Commission proposal for a regulation on the CO2 emissions of new cars, putting in place a framework to encourage industry to develop greener, more fuel efficient cars. The UK is urging the Commission to adopt a longer term target of 100 grammes of CO2 per kilometre, as part of the Government’s wider strategy to address the issue of climate change. This proposal has the potential to deliver a cut in CO2 emissions from new cars of about 40 per cent. over the next 12 years, and by 2020 could reduce the running costs for consumers buying new cars by about £500 a year, a particularly important consideration at a time of rising oil prices. The European Commission’s own proposals for a target of 130 grammes of CO2 per kilometre by 2012 are expected to deliver annual CO2 savings of just over 6 million tonnes a year in the UK by 2020. Achieving the UK-proposed target of 100 grammes of CO2 per kilometre by 2020 would save an additional 5 million tonnes of CO2 by 2020. In total, this is equivalent to around a third of the total projected CO2 savings from domestic transport, or around 2 per cent. of the UK’s current overall CO2 emissions. Where the Government have a view on aspects of the proposed regulation, we set this out in the consultation document. The UK strongly supports a move to mandatory CO2 targets for new cars; this would be better for the environment and better for consumers. We would like to see a strong environmental outcome and for this reason we have been taking the lead at the European level for a longer term target of 100 grammes of CO2 per kilometre by 2020 to be added to the regulation. We also want to avoid unfair competitive distortions between car manufacturers. We support the Commission’s approach for setting CO2 targets for individual car manufacturers, and we also welcome the proposed derogation for manufacturers who only sell cars in small volumes. We believe that it is also important to add a provision to the regulation to ensure that ‘niche’ manufacturers (those that only make a narrow range of vehicle types) whilst being subject to challenging targets, are not unfairly penalised. We are seeking views over the coming months on our underlying analysis and negotiating position via a public consultation. This consultation closes on Friday 3 October 2008, but in the interim the Government will continue their discussion and negotiations at the European level, during which we may have to take further decisions on our negotiating position. We therefore encourage early responses from stakeholders. Copies of the consultation document and accompanying impact assessment are being sent to the House Library.