German and French industry ministers say EU plans to fine car makers are 'too harsh'
Tue 26 February 2008
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Responding to complaints from German and French industry ministers about EU plans to fine car makers for failing to reach 2012 car targets, Environment Commissioner Stavros Dimas said that the point of fines was to encourage car makers to change their behaviour.
In discussions held at the European Competitiveness Council Mr Dimas responded to the industry ministers complaints about the fines saying: “That’s the point: the fines are meant to hurt so much that car companies will change their behaviour to avoid them.”
The meeting was the first chance for ministers from the 27 EU member states to comment together on the Commission’s 2012 car CO2 plans announced in December. The plans include a formula to fine companies that exceed the limit. At first it would be £20 for every gram per kilometre over the limit, rising to £70 per g/km by 2020.
The German and French positions were backed by ministers from Eastern European countries while the British representative, a civil servant not a minister, spoke but did not comment on the level of fines. The British Government, according to a report by the BBC, has yet to adopt a formal position on the issue.
Meanwhile, the UK car makers association, the SMMT, argued at a briefing in Brussels that the proposed fines will price carbon from cars’ tailpipes at a far higher rate than carbon traded under the EU Emissions Trading Scheme.
The SMMT told MEPs and other participants that tailpipe targets should be delivered with appropriate lead times and that any penalties should be consistent with the price of carbon.
The SMMT Chief Executive, Paul Everitt, said: "It is important that we protect choice in the market place and diversity of UK car manufacturing. We host seven volume car makers delivering 1.5 million new models each year, as well as the largest number of niche and low volume producers in Europe. It is essential that new CO2 rules are built on a thorough understanding of our industry."
Brussels-based environment group T&E argues, however, that the fines proposed by the EC are too low and should be more like £115 for every g/km the proposed target is exceeded. T&E says that if the cost of complying with the proposed regulations is going to be as high as car makers say it is, then fines need to be commensurately high or there will be insufficient incentive for manufacturers to make the necessary investments to meet the targets. If fines are set too low, car makers could opt to pay the fines rather than make the investments needed in lower carbon technologies.
In a more recent development, MEPs are reported to be questioning the legal basis for the Commission applying fines on car makers. A preliminary expert opinion prepared for the legal affairs committee in the Parliament, obtained by a German newspaper, says that fines give the appearance "of a tax for the benefit of the community which the community has absolutely no competence to charge."
The legal affairs committee now wants to ask the Parliament's legal service to draw up a report looking into the matter.
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