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German carmakers face C02 fight

2008-04-23 19:07
Berlin - Germany's powerful car lobby has trained its gas-guzzling fire-power on European Union plans to cut greenhouse gas emissions, putting the grand coalition governing in Berlin under strain.

German Chancellor Angela Merkel won plaudits across Europe last year when she presided over the adoption of ambitious EU targets to fight climate change by reducing carbon emissions.

But now it comes to pursuing those goals by making car makers clean up their act, Merkel's government is waging a rearguard campaign to delay implementation, reduce penalties and ease the burden on Germany's luxury automobile industry. A senior government source told a group of visiting European journalists that Berlin accepts the need for legal curbs on car emissions of 120 grammes per km on average from 2012, with fines for non-compliance rising gradually over three years.

The source said Germany's conditions were that all categories of cars should have to cut their emissions - including smaller, less polluting vehicles produced by France and Italy that already meet the EU goal - and that the mandatory system should be phased in.

Germany has been trying to reach a compromise with France on burden-sharing on carbon dioxide (CO2) reductions from cars but expert talks recently stalled and the issue was escalated to the level of Merkel and French President Nicolas Sarkozy.

"There's a possibility to come to an agreement with France on a fair system because we are very close, I expect before the next (EU) environment council in June," the government source said, speaking on condition of anonymity.

But elsewhere in Berlin the tone is much more hostile to the European Commission's proposals, seen as discriminating against the German car industry and using excessive regulation to micro-manage how emissions reductions are achieved.

Love affair

In a country with an enduring love affair with big, high-powered cars and no national speed limit on its motorways, brand names such as BMW, Mercedes, Audi and Porsche are symbols of national pride as well as export champions.

Some senior politicians fear Brussels could undermine those brands in fast-growing markets such as China and India by emasculating their performance through emissions limits.

The powerful car manufacturers' association VDA, headed by former Christian Democratic minister Matthias Wissmann, is fighting against any general EU limit on emissions.

"The facts show that a single CO2 upper limit would be the wrong way to go," a policy statement on emissions on the VDA's website said.

Such arguments find receptive ears in the chancellery, if not in the Environment Ministry.

The government suffered a reverse at the hands of the car lobby this month when it was forced to postpone a new standard for mixing biofuels made from crops into petrol because it would have forced millions of motorists to buy more expensive fuel.

That setback means Berlin is no longer likely to meet its self-set target of achieving 17 percent use of biofuels by 2020 - well above the EU's target of 10 percent biofuel usage.

Analyst Ulrike Guerot of the European Council on Foreign Relations said the blow on biofuels reflected the importance of the car in German life.

"The car is at the heart of the German male, and quite a lot of females too. We do big cars," she said, citing the importance of company cars in many German workers' benefits.


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