European Auto Manufacturers Feeling Pressure Over Impending CO2 Emission Targets

European car manufacturers are developing new technologies and advancing the use of alternative fuels to meet target date of 2008 for reduced CO2 emissions.

Auto manufacturers in Europe, especially premium car producers, are facing an uphill battle to reduce CO2 emissions from new passenger vehicles, as the target date of 2008 fast approaches to reduce the fleet average of CO2 emissions to 140 g/km by 2008 and 120 g/km by 2012, according to a Frost & Sullivan research report.

Although the European original equipment manufacturers (OEMs) voluntarily agreed to reduce the fleet average of CO2 emissions, the European Union (EU) Commission is expecting the Association des Constructeurs Europeens d'Automobiles (ACEA) to bring down the industry fleet average of CO2 emission to 130 g/km by 2012 according to the new agreement rather than 120 g/km as agreed earlier, the report notes.

The EU Commission has recommended a blend of ethanol with gasoline and diesel, to reduce emissions, and has also suggested that manufacturers install gear-shift indicators and tire-pressure monitoring systems in new vehicles to assist consumers.

In order to meet future CO2 emission targets, an OEM will need to have 40 percent to 50 percent of its fleet powered by diesel and 10 percent to 15 percent of the fleet running on biofuels or natural gas, or on a hybrid powertrain.

"As a medium-term strategy over the next three to five years, OEMs are expected to introduce micro hybrids, mild hybrids, ethanol, biofuels and LPG into their fleets to reduce CO2 emissions," notes Frost & Sullivan Research Analyst Krishnasami Rajagopalan.

While some auto makers, such Fiat, PSA and Renault, have fleet averages of 140g/km to150 g/km of CO2 and are on target to meet the ACEA target for 2008, premium car makers, who have a fleet average of 160g/km to 190 g/km of CO2 will probably not be able to meet the emission reduction goals, according to the report.

Reducing emissions below 140 g/km of CO2 will be possible mainly with the help of alternative fuels and hybrids (micro, mild and full). But further development or market acceptance of these alternative fuels and hybrids is hampered by the distribution network, availability and high implementation costs.

"While advancements in engine technology have helped reduce emissions to an average of 160 g/km, hybrids, ethanol, biofuels, compressed natural gas (CNG), hydrogen and fuel cells are necessary to reduce them further," explains Rajagopalan. "The main priority of OEMs today is to reduce emissions, which will require the help of local governments and fuel suppliers to promote alternative fuels and hybrids in a cost-effective manner."

It is not known if any local governments will impose fines on OEMs who are not able to meet the ACEA agreement by 2008, and it is almost certain that some OEMs will not be able to meet the agreed limits by 2008, the report concludes.