British car manufacturers have won a four-year delay to the introduction of European rules designed to force them to reduce carbon dioxide emissions from new cars.
Jaguar Land Rover was granted a special deal after Britain joined ranks with other car-producing EU states to water down fuel efficiency targets proposed last year.
The highest levels of fines for failing to comply with the targets will not come into force until 2019, not in 2015 as previously proposed.
The deal means manufacturers will be able to delay investing in expensive carbon-reduction technology for several more years.
MEPs and the 27 EU member states have agreed to abandon plans to force the industry to reduce average CO emissions from around 158g/km last year to 130g/km by 2012.
Instead, the 130g/km target will be phased in over three years from 2012. A third of each company’s output will be exempted from the target in 2012.
Under the special deal for smaller manufacturers, Jaguar Land Rover will be able to choose to comply with a much less onerous target of a 25 per cent reduction by 2015 from its 2007 CO2 average.
Without the deal, the Indian-owned maker of high-emission executive cars and 4X4s would have had to reduce emissions by 38 per cent.
Jaguar-Land Rover last week responded to a sharp fall in sales by laying off 850 agency workers at plants in Castle Bromwich, Solihull, Whitley, and Gaydon, all in the West Midlands.
Britain had pressed for a special deal for Jaguar Land Rover because it argued that the rules favoured much larger companies which owned a range of marques of varying sizes and had more flexibility in how they met the target.
Other British manufacturers which produce fewer than 10,000 cars a year, including Aston Martin, Lotus and McLaren, have also won the right to have special targets which will be easier for them to achieve than the industry-wide one.
LTI, which makes London’s black cabs, was granted exemption from the rules. Environmental groups said the overall agreement reached between MEPs and the 27 EU member states was a victory for car manufacturers at the expense of the environment.
In 1998, car manufacturers agreed a voluntary target of 140g/km for this year. Despite making very slow progress towards it, they claimed until late last year that it was still possible they might reach it.
Under the deal, the fines for failing to comply with the new compulsory target have been reduced to a fraction of the level proposed by the European Commission last December. They will start at 5 Euros for the first 1g/km over the target and the full fine of 95 Euros per gram will not be imposed until 2019.
Many manufacturers are likely to choose to pay the lower fines rather than meet the targets because the total paid in penalties will be cheaper than investing in new carbon-reducing technology or phasing out their least efficient models. Car companies tend to make most of their profits on their bigger, more expensive models.
Tony Bosworth, Friends of the Earth’s transport campaigner said: “This is a depressing outcome on a vital piece of climate legislation. it’s riddled with delays, loopholes and concessions.
“This was an opportunity to force the car industry to put its foot down and speed up progress in making smarter cars that use less fuel – but EU politicians have caved in to industry lobbying and allowed it to coast along at its own pace for a few more years.
“Along with other nations, the UK Government’s key priority was to get a good deal for its own car industry – the interests of the planet and its people have clearly come a poor second.”
Europe’s commitment to dramatic cuts in car emissions was seen as a cornerstone of its attempt to argue for a post-Kyoto climate change deal at next week’s global summit in Poland.
The deal includes a new long-term target of 95g/km for 2020 but the EU has yet to agree with the industry how this will be achieved.
Geoff Hoon, the Transport Secretary, said: “This has potential to be the biggest CO2 saving measure in transport.
“At the same time it also takes account of the needs of UK manufacturers. It makes sure that smaller or niche manufacturers, who provide employment to thousands of people around the UK, play their part in reducing CO2 emissions but are not put out of business by targets they will just not be able to meet.”
But Chris Davies, the Liberal Democrat MEP Environment Spokesman, said: “This takes us backwards from last year’s ambitious agenda of reducing carbon emissions. The legislation now agreed will see European car manufacturers overtaken by Japanese and American rivals in terms of environmental innovation.
“By failing to ensure a dissuasive penalty structure, we have effectively handed the car industry an extra decade to adjust their technology. The full penalty structure will now not enter into force until 2019.”