European Policy

In December 2008, new legislation aimed at reducing carbon dioxide emissions passed the European Parliament. As the Council of the European Union (the other EU legislative body) is expected to follow this decision, the EU is set to adopt an extremely tough piece of legislation, part of an ambitious European energy and climate change package to which the industry will continue to contribute. The European auto industry is ready to meet the new law's standards for passenger cars, despite the sudden dramatic economic downturn that severely limits the resources available to respond.

Under the legislation, manufacturers will be required to ensure that their average fleet CO2 emissions – for all the vehicles they make that are registered in the EU – are below 130 g/km. In 2012, 65 percent of the manufacturer's fleet must comply with this target. The percentage increases to 75 percent in 2013, 80 percent in 2014 and 100 percent in 2015. The long-term target for CO2 emissions is set to 95 g/km; it will be reviewed again in 2013.

This legislation gives the auto industry some essential flexibility to adjust its development and production cycles to the legal requirements and to limit the financial risks caused by largely unpredictable factors, including consumer preferences, market trends, economic developments and legal requirements in different fields.

The industry will continue to invest heavily in research and development and new product programs in order to reach the short-term targets. The long-term target will require technological breakthroughs, new refueling infrastructure and a swift renewal of the car fleet on Europe's roads.