THE European Parliament's environment committee yesterday voted to cap carbon dioxide from all new cars in 2012, rejecting German demands to ease costs for manufacturers such as Daimler and Porsche by excluding part of their fleet.

The committee in the European Union assembly decided to impose the emission curbs in one step rather than bow to German demands for a phase-in over three years until 2015. The verdict endorses a proposal by the European Commission and follows a months-long German campaign to scale back the limits aimed at fighting climate change.

'This is a big blow for corporate lobbying,' Chris Davies, a UK member of the environment committee, said in Brussels after colleagues stood up and cheered the verdict. The panel also upheld penalties that Germany sought to cut in half and added a stricter emissions target for 2020.

The vote sets up a showdown with Germany, which objects to draft EU rules that pit its premium brands against smaller, cleaner cars from France's Peugeot Citroen and Italy's Fiat. The measures, which still need the support of the full 785-seat EU Parliament and national governments, also affect non-European manufacturers including General Motors, Toyota and Hyundai.

About 15 million vehicles are sold each year in the EU, with cars accounting for more than 10 percent of releases of CO2, the main greenhouse gas blamed for rising global temperatures.

Prices may rise

Average car prices may rise 1,300 euros (US$1,916) because of spending on the new technology required, according to the commission, which proposed the law last December to replace 2008-2009 voluntary goals that the industry is now on track to miss.

'Overall, this is negative for EU car makers, which may need to bring forward technology spending plans to meet 2012 targets,' Credit Suisse analysts in London led by Arndt Ellinghorst said in a note yesterday.






The legislation would cut average car CO2 emissions by a fifth to 130 grams a kilometer in 2012 through varying targets for individual manufacturers, with the heaviest vehicles having to make the biggest reductions. Based on 2006 emissions data, the draft plans would force German makers to slash CO2 by as much as 49 percent compared with a maximum 15 percent reduction for French and Italian producers.

While the cuts for Fiat and Peugeot as well as France's Renault are smaller than those proposed for German car makers, these three manufacturers' individual limits would each be below 130 grams of CO2 a kilometer to pull the industry average down to that level.

The Parliament's environment committee upheld this arrangement, refusing to force French and Italian manufacturers to do more so German competitors could do less.

The committee 'stood up to the demands of the car industry,' the European Federation for Transport and Environment said. 'Europeans need fuel-efficient cars now.'