Carmakers remain in dark about next EU cap on carbon dioxide

[STRASBOURG, FRANCE] European Union negotiators may make a last-ditch attempt to reach an agreement this year on a tighter cap on carbon dioxide from cars after failing to seal a deal in the early hours of Tuesday.

Representatives of EU governments and the European Parliament are weighing the possibility of an extraordinary meeting next week in a bid to bridge a split over a CO2-reduction target in 2030 compared with 2021 standards, according to a spokeswoman for Austria, which holds the bloc's six-month rotating presidency through December. That country's officials are negotiating on behalf of the EU's 28 national governments.

"We are offering the EU Parliament a chance for a final meeting under our presidency next week, possibly on Dec 19," the spokesman, Vera Puererfellner, said Tuesday from Brussels. "We are making enormous efforts to find a compromise and expect the same from the other side."

Europe is seeking to show greater resolve to clean up road transport amid heightened warnings about the catastrophic environmental impact of climate change and about the economic risks of losing out to the likes of China in the technological transition to low-emission vehicles.

Talks are targeting a compromise after the full EU Parliament in early October demanded an average 40 per cent CO2 cut by autos in 2030 compared with 2021 and the bloc's governments called for a 35 per cent reduction over the period. Both targets are more ambitious than a 30 per cent cut in 2030 proposed by the European Commission, the EU's regulatory arm, in draft legislation last year. Car-industry groups have warned the two more ambitious proposals would threaten automotive jobs and consumer choice in Europe.

The EU's current average caps on CO2 from cars are 130 grammes a kilometre set for 2015 and 95 grammes fixed for 2021.

A meeting that started on Monday evening in Strasbourg, France - home of the EU Parliament - with the goal of striking a deal ended without an agreement. Both sides called it quits at around 3am on Tuesday after almost nine hours, according to Ms Puererfellner.

"They were tough and intense negotiations," she said. Should no accord be reached this month, negotiations would continue under the forthcoming Romanian presidency of the EU starting in January.

Both sides also have to settle differences over an interim CO2-reduction target in 2025 - the EU Parliament wants a 20 per cent cut while governments support a 15 per cent one - and over a demand by the assembly for a 35 per cent sales quota for zero- and low-emission vehicles in 2030.

About 15 million autos are sold each year in the EU, with cars accounting for more than a 10th of the bloc's releases of CO2, the main greenhouse gas blamed for rising global temperatures. Electric vehicles in Europe have a market share of around 1.5 per cent.

BLOOMBERG