12 April 2019

Is the right approach being adopted for emissions laws?

According to the IPCC (The Intergovernmental Panel on Climate Change) Global Warming Special Report 2018, if global temperature rises by 1.5°C, humans will face “unprecedented” climate-related risks and weather events. Current predictions suggest Planet Earth is on track for a 3-4°C temperature rise. Some experts say that we may have surpassed the tipping point and are on the road to devastating damage. The IPCC report states the need by 2030 to cut 2010 global emission levels by about 45%; limiting warming to 1.5°C is not impossible but will require unprecedented societal changes. Although road vehicles get the banner headlines to significantly reduce emissions other activities need to do so too.

Emission rules relating to cars risk mocking their intended purpose. The European Union OEMs need an average CO2 emission of 95g/km across all cars by 2021 falling to 65g per km by 2030. The industry spends incredible sums on battery and other technologies in addition to cleaning fossil fuelled engines; however, rule compliance seems to allow for smart contracts and financial muscle without technological advancement on reducing emission.

Eyebrows were raised by the news of Fiat Chrysler Automobiles (FCA) paying Tesla reportedly hundreds of millions of Euros to pool their fleet CO2 emissions to ensure FCA‘s compliance.

FCA’s products include Alfa Romeo, Ferrari, Maserati and Jeep.The group’s overall average stands at 123g/km of CO2 and unlikely to diminish in time to meet the new rules. Answer- do a deal with Tesla whose Model 3. S and X range will count as part of FCA’s fleet for calculating the CO2 average. FCA’s future compliance for the moment has nothing to with ability but instead financial resources to pay Tesla.This external deal permitted under EU rules is probably the first.

EU rules allow OEM’s to establish an average across their brands e.g. Volkswagen relies on Audi; Seat and Skoda; PSA has Peugeot,Citroen and Vauxhall. This begs the question how some of the OEM’s will comply by 2021 and avoid swingeing fines of about £82 for every g/km of CO2 over the 95g/km limit for each car they sell; the fines could be huge. Therefore, the OEMs will use all the (lawful) tricks in the book to comply.

Are the correct approaches to emission rules being applied and achieving their purpose for which they were intended?

Arguably, when Dieselgate occurred VW’s motivation for the breach (and other OEM’s too) was that the rules expected too much too quickly forcing shortcuts to comply. If lessons are to be learnt it is necessary to ask whether the rules are realistic and at risk of encouraging corrupt practice?

Is external pooling undermining genuine attempts to reduce vehicle emissions? FSA’s payments to Tesla could be better directed to FSA’s own low emission R and D. The dramatic demise of diesel sales, partly led by an adverse media and current laws, missed an important loss of revenue. Profits earnt from diesel contributes to OEM’s development budgets. Jaguar Land Rover have been wrongfooted in part due to the wrong overall powertrain mix.

Future rules must take account of their consequential effects rather than be applied in a rather binary approach. Rules for battery and hybrid vehicles need to take account of emissions at the tailpipe, original energy sources and environmental disruption from the extraction of rare earth materials.

According to the 2018 IPCC report limiting global warming to 1.5°C, as compared with 2°C, could avoid the number of people exposed to climate-risks and related poverty by up to several hundred million by 2050. Such avoidance will not be achieved by fancy paper pushing exercises between OEMs.

Julian Wilkins

Postscript: I attended last weekend’s Goodwood’s Members Meeting in beautiful Sussex. An amazing selection of cars from all eras and the chance to see them close up in the paddock. The Standout for me was a Rover SD1 winning the Gerry Marshall Trophy. Despite being over 40 years old the David Bache design remains outstanding, and a great influencer such as the Tesla S and Audi A5. Fantastic! '

Publisher: Shaun Hunter

Global News Editor: Trisha Chowdhury

Legal Affairs Editor: Julian Wilkins

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