EU Nations Agree To Seek Softer Law to Curb Car Emissions

European Union governments agreed today to seek a revision of a draft law to curb emissions from cars, bowing to calls from Germany for more flexibility to protect the competitiveness of the domestic automobile industry.

EU environment ministers meeting in Luxembourg authorized Lithuania to start talks with the European Parliament to change a preliminary deal on the measure, which was blocked by German Chancellor Angela Merkel in June. The proposal would cap average carbon discharges by passenger vehicles in the bloc at 95 grams a kilometer in 2020 through varying targets for individual manufacturers ranging from Volkswagen AG (VOW) to General Motors Co. (GM)

“The flexibility margin has to be narrow,” Valentinas Mazuronis, the environment minister of Lithuania, which holds the EU rotating presidency, said. “Results have to be achieved as soon as possible.”

The decision was made after Germany built a coalition of countries supporting its plan to delay the start of the emission curbs. It proposed the law should be fully applicable to all new cars only in 2024, according to a document submitted by the government before the quarterly ministerial meeting and obtained by Bloomberg News.

“It was made clear from all sides that we want an ambitious climate-protection goal and, at the same time, it was made clear that in some places more flexibility must be sought and can be found,” German Environment Minister Peter Altmaier told reporters after the meeting. “In this narrow room for maneuver, we will find a solution in the coming weeks.”

Backing Germany

Countries including the U.K. and Poland supported the German call for a revision of the draft. Ministers from nations such as Belgium, France and Italy said they backed the preliminary deal reached in June between EU governments and the European Parliament. To be enacted, the draft law would need approval from both member states and the bloc’s assembly.

To determine each manufacturer’s average emissions, 80 percent of its new cars should be taken into account in 2020, 90 percent in 2022 and 95 percent in 2023, under the German plan. The proposed phase-in is not a “limited” change to the June compromise, EU Climate Commissioner Connie Hedegaard said.

The EU is trying to reconcile its ambitions to lead the global fight against climate change with efforts to help the region’s economy recover from a recession. Current EU rules require carmakers to cut discharges to 130 grams a kilometer on average in 2015 and set a non-binding goal of 95 grams for 2020.

Emissions Trading

At today’s meeting some nations also raised the issue of a draft rescue plan for the EU emissions trading market, Mazuronis said. Governments are considering a measure to delay sales of some carbon permits after emission prices slumped to an all-time low of 2.46 euros a metric ton amid a record glut of allowances.

“I’m optimistic we will solve this issue in the near future,” Mazuronis told reporters after the gathering.

Hedegaard said she saw “encouraging signs” on the emergency fix, known as backloading. She also said the European Commission, the bloc’s regulator, will present a proposal in the “not too distant future” on airlines in the bloc’s carbon market in response to a pledge by the United Nations’ aviation agency to start work on a road map to a global deal on an emissions market for aviation.

Ministers also reached a deal on the EU position for the UN’s climate talks in Warsaw next month. It includes a call on countries worldwide to agree at the summit in Poland to a process to formulate emission targets for a 2015 global deal, including a timetable on their commitments in 2014.

“We agreed on a mandate that is united and strong,” Polish Environment Minister Marcin Korolec told journalists.

To contact the reporters on this story: Ewa Krukowska in Brussels at ekrukowska@bloomberg.net

To contact the editors responsible for this story: Lars Paulsson at lpaulsson@bloomberg.net

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