CO2 Emission Credits for Car Manufacturers under New EU Regulation

The automotive industry will have a greater incentive to invest in new technologies that reduce CO2 emissions from new cars, under legislation adopted by the European Commission on 25 July 2011. The Regulation enables motor manufacturers to receive CO2 emission credits if they fit new cars with approved "eco-innovations" which reduce emissions. The credits will help the industry meet the European target of limiting CO2 emissions from new cars to an average of 130 grams/km by 2015. Eco-innovations will count for up to 7 g CO2/km towards the target.

The Regulation

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Under the Regulation, a technology can qualify as an eco-innovation if it is new to the market, contributes to significant CO2 savings and is not otherwise taken into account in determining the level of CO2 emissions from vehicles. The technology should also aim at improving vehicle propulsion or the energy consumption of devices that are mandatory, without compromising vehicle safety. This means, for instance, that solar panels converting sunlight into electric energy could potentially qualify as an eco-innovation but an energy-efficient in-car music system would not.

The Commission will assess applications submitted by car manufacturers and component suppliers and adopt decisions approving generic eco-innovations. The actual CO2 savings from the eco-innovations for each specific car will be certified as part of the vehicle type approval procedure.

Background

EU legislation requires that by 2015, CO2 emissions from all new cars registered in the EU should not exceed 130 grams/km, around one-fifth below 2007 levels. The target will be gradually phased in: in 2012 65% of each manufacturer's newly registered cars must comply, rising to 75% in 2013, 80% in 2014 and 100% by 2015. Manufacturers whose fleet average exceeds the limit from 2012 will have to pay a penalty for each car registered.

The Commission will develop detailed technical guidelines on how companies should prepare applications to have their eco-innovations recognised.

Source: EU Commission