UPDATE 1-French carmakers back German bid to delay EU carbon limits-sources


By Barbara Lewis and Laurence Frost

BRUSSELS/PARIS, Sept 27 (Reuters) - Germany has enlisted French carmakers' support for a last-ditch bid to delay implementation of EU carbon dioxide limits by four years, government officials and diplomats said on Friday.

Berlin wants to re-open and weaken draft car emissions rules agreed in June by introducing the phase-in period, under a proposal circulated by German diplomats and seen by Reuters.

Chancellor Angela Merkel's government is engaged in an uphill struggle to water down the deal to cut average new car emissions to 95 grammes of CO2 per kilometre by 2020.

Germany has so far been unable to secure support from a blocking minority of governments to dilute the new rules, ahead of a vote scheduled next week.

But Renault and PSA Peugeot Citroen have broken ranks with Paris to side with their Germany-based industrial partners Daimler, BMW and General Motors' Opel division, officials said.

"We became aware of this common industry position last week," a French ministry official said. Germany is expected to "use it to press the new demands", the official added.

Renault and Peugeot, which had raised no previous objections to the proposed CO2 limits, declined to comment on whether they now supported Germany's bid to loosen the rules.

Renault and Peugeot have previously said they stand to gain competitive advantage from new CO2 limits, thanks to the smaller than average size and fuel consumption of the cars they sell.

"Peugeot has already taken the 2020 targets into account and is well on track to meet them - while also aware that they are tough," a spokeswoman said.

But the French carmakers have come under pressure from their respective alliance partners to adopt a common stance on CO2.

Renault and Japanese affiliate Nissan share a growing number of engines and vehicle platforms with Daimler.

Peugeot is hoping to renew a major engine-sharing deal with BMW and developing future vehicles with 7 percent shareholder General Motors and its Germany-based Opel division.

Renault executives often discuss the company's regulatory stance with Daimler counterparts, a source close to the French carmaker said. "Renault and Daimler talk a lot about this kind of stuff."

Merkel intervened in June to prevent an earlier scheduled vote, after senior German officials unsuccessfully pressured other governments to oppose the draft, warning of possible consequences for cooperation in other areas.

Under the latest German proposal the average CO2 emissions limit of 95 grammes per kilometre would apply only to 80 percent of cars produced in 2020, rising by 5 percentage points each year to reach full implementation only in 2024.

The final rules should be "designed in a way that manufacturers are enabled to reach the 2020 target in the most cost-effective way", the German proposal says. "Therefore they need more flexibility in the transition phase."



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