EU pushes Asian car firms to make CO2 cuts

Ministers express concern over Japanese, Korean, offers, threaten legislation if no deal by May

The EU is upping the pressure on Japanese and Korean car makers to volunteer reductions in average carbon dioxide (CO2) emissions from their vehicles. At their quarterly meeting in Brussels today, EU environment ministers expressed concern at the failure so far of the car makers' associations to sign up to a voluntary agreement similar to the one agreed by the European industry body Acea last year.

Hailed at the time as "the most wide-ranging and most important" environmental voluntary agreement industry has ever concluded with the EU, the Acea deal committed European manufacturers to reduce average emissions from new cars by around 25%, from 186 grams per kilometre today to 140g/km by 2008 (ENDS Daily 6 October 1998).

As all the main US manufacturers are represented within Acea, the only major car producers left outside the agreement were Japanese and Korean. The European Commission has been holding talks with firms from the two countries since October to try to conclude equivalent deals.

In a statement released today, ministers said the European Commission should propose alternative measures to ensure car makers achieve the EU's target for more efficient cars - including possible legislation - if voluntary agreements are not finalised by the end of May. Ministers also made great use of the threat of legislation to persuade Acea to agree an acceptable deal, but they are aware that such a move would be difficult, particularly in the face of international free trade rules.

According to the Commission, the Japanese have shown far more willingness to reach a deal than Korea. Last month, the Japanese car makers association, Jama, presented a draft offer in which it said it was "ready to make a commitment to reduce the CO2 emissions of its new cars sold in the EU" and "confident of its ability to match the technological progress of Acea members". The Commission's negotiators believe they can iron out the outstanding issues - including details on intermediate targets, market changes and monitoring - in talks with Jama next month.

The Korean car makers association, Kama, has told the Commission that it would be willing to accept an "ambitious, but practicable and affordable" reduction target, but claimed it would be difficult to match Acea's commitment. Kama argues that it lacks the technologies of EU companies and states that the EU market is of limited importance to Korean manufacturers. It also claims that the current "industrial restructuring" process in Korea would hamper its ability to fulfil such a commitment.

Follow Up:
EU Council of Ministers, tel: +32 2 285 6111.

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