EU Tightens Car-CO2 Limit in Deal With Germany for 2021

The European Union tightened a cap on carbon dioxide from cars, ending a skirmish with Germany through a compromise that eases the potential costs for automakers such as Volkswagen AG.

The European Parliament voted today in Strasbourg, France, to cut average car-CO2 emissions to 95 grams a kilometer in 2021 through varying targets for individual manufacturers. Current EU rules cap auto discharges at 130 grams a kilometer on average as of 2015 and set a non-binding goal of 95 grams for 2020.

The European Commission, the EU’s regulatory arm, proposed in mid-2012 to make the 2020 goal binding. Chancellor Angela Merkel of Germany, the EU’s biggest car-producing country, insisted before she won re-election last year on a looser binding target for 2020.

“We have to strike the balance between protecting the environment and promoting the competitiveness of our economy,” Development Minister Kostis Hatzidakis of Greece, which currently holds the 28-nation EU’s rotating presidency and represents the bloc’s national governments in that role, said in an interview in Brussels last week.

The compromise approved by the EU Parliament will impose the 95-gram cap on 95 percent of the new car fleet in 2020 and 100 percent beginning in 2021. EU governments have already signaled support for the deal, making their final approval a formality in the coming weeks or months.

The new law helps an EU goal to reduce greenhouse gases, which are blamed for global warming, by a fifth in 2020 compared with 1990. CO2 is the main greenhouse gas.

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