EU environment commissioner Stavros Dimas will release regulatory proposals next month to force European car makers to reduce CO2 emissions. He is concerned that Euro car manufacturers are not on track to meet the voluntary targets that they have in place for 2008.
In an Automotive News interview with Ivan Hodac, secretary general of ACEA, the European car manufacturers association, Hodac says, "There should be no talk of legislation before 2008. That's when the industry is committed to reach CO2 emissions of 140g/km, and the results won't be known before the autumn of 2009 at the earliest."

Rather than imposing rules on the car-makers, Hodac favors demand side regulations including carbon taxes on fuels to encourage the use of alternative fuels and more fuel efficient vehicles. The European car makers agree that a taxation approach is the best solution to CO2 reduction and that it should be linear in direct proportion to carbon emissions. They have yet to agree on the levels of taxation, and at what emission levels it should start. They want to take the opposite approach of something like CAFE where they are forced to build a particular product with no guarantee of a demand. Instead they want the government to use taxation to encourage the demand for more efficient vehicles.

[Source: Automotive News - subscription required]

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