CO2-belching cars face fines

The measure is meant to stimulate producers to make cleaner cars. But carmakers are crying foul, saying the measures will sound the death knell for Europe's industry. And the environmentalists aren't happy either.

Luxurious, gleaming cars are parked outside the European Commission in Brussels, a collection of large black Audis and silver Mercedes.
Today a proposal was made inside this very building here that could mean the end of the road for these so-called gas-guzzlers.

The idea is to make it much more expensive to get away with producing high fuel consumption cars in future because they will have to pay fines for exceeding a limit on CO2 emissions.

Environment Commissioner Stavros Dimas says it is about encouraging a new kind of smaller, cleaner cars:

"There is a strong incentive to make the technological improvements that are necessary to reduce the emissions of CO2. We think that the scale of fines will be a deterrent and will be the correct incentive to stimulate innovations."

Commissioner Dimas has put forward a system of fines to apply to all new cars in the EU. From 2012, carmakers will have to pay a penalty for every gram of CO2 emitted that is above a certain limit. So makers of the most polluting cars - like Porsche - will foot the biggest fines.

Crippling

The penalties will rise sharply year on year. Europe's car industry will have to pay 37 billion euros by 2016 if it carries on making the same inefficient cars as today. The proposals will cripple the industry, says Ivan Hodak from the Association of European Automobile Manufacturers Association:

"They will probably move outside Europe. They will have enormous financial difficulties.

If you look at the fines: if Volkswagen would miss the target by five grams, they will have to pay one and half billion euros. It's unheard of.

This move is totally unprecedented."

Germany, home to luxury car makers like Mercedes Benz, says the measure is biased in favour of countries like France and Italy, who make small and cleaner cars and who'll suffer less.

Environmentalists

So car makers aren't happy - and neither are environmental groups. Aart Petersen from the NGO Transport and Environment says these penalties have no teeth:

"They will only reach a credible level in 2016 whereas world leaders as recently as a few days ago in Bali said they need considerable reductions NOW. The Commission is giving us nothing of that. There is NO incentive for innovation and for development towards new technologies and considerably more efficient cars that use 40-60 per cent less fuel than we use now."The proposals still have to be put to EU member states before being finalised in 2009. It's clear that Europe's car makers are already revving up their engines for a fight. - by Vanessa Mock, Radio Netherlands