The Wall Street Journal: EU Targets Oil Firms In a Fresh Attempt To Reduce Emissions

By JULIANE VON REPPERT-BISMARCK
January 31, 2007 5:56 p.m.

BRUSSELS — The European Commission opened a second front in its fight against climate change with a call for binding rules that will force oil refiners to cut carbon-dioxide emissions from vehicle fuel 10% by 2020.

The commission is facing resistance from Europe’s auto industry and national governments over a plan to cut emissions from new cars. Now it is picking a potential fight with oil companies.

If endorsed by European Union governments, the law will take effect in 2011, EU officials said. The plan represents another step toward the commission’s goal to cut dependence on imported fossil fuels by increasing the use of biofuels and curb the economic impact of global warming.

The commission has been forced to delay by a week a decision on a separate, hotly debated law that would force auto makers to slash carbon emissions from new cars 25% by 2012. German Chancellor Angela Merkel said she will block such a rule. Auto makers warned of massive job cuts and vowed to fight the plan.

Cornered by such a powerful lobby, European Commission environment chief Stavros Dimas is “moving in the direction” of a compromise, an EU official said.

This would involve raising a mandatory limit on car emissions to 130 grams a kilometer on average from a 120 grams-a-kilometer cap planned at present, the official said. Today, cars generate an average of 160 grams of carbon dioxide for every kilometer traveled, accounting for about 10% of Europe’s carbon-dioxide pollution.

The proposals represent an early, though tentative, victory for Europe’s auto industry — particularly German manufacturers such as DaimlerChrysler AG and BMW AG. The industry has been lobbying EU environmental regulators to rely less on technological improvements — such as more-fuel-efficient engines — and more on the promotion of clean-burning fuels.

The commission admitted it has no overall estimate of how much the cuts will cost oil companies.

The industry “definitely” will be fighting for amendments, said Peter Tjan, secretary-general of Europia, a Brussels group that represents such companies as Exxon Mobil Corp. and Royal Dutch Shell PLC.

Yesterday’s plan threatens to entangle the oil industry in costly red tape, Mr. Tjan said, rather than focusing on the role of auto makers in reducing emissions.

“We support carbon-dioxide cuts in transport,” Mr. Tjan said. “But we want to see laws on cars.”

–Stephen Power in Frankfurt contributed to this article.

Write to Juliane von Reppert-Bismarck at [email protected]

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