Motor industry comments on next stage of EU Emissions Trading Scheme

23 January 2008 #SMMT News

Today the European Commission published its directive on the next phase of the EU Emissions Trading Scheme (ETS) and the UK motor industry is keen to reinforce its commitment to cutting carbon emissions. The automotive sector has consistently worked to be open and transparent on this matter and SMMT published its eighth annual sustainability report in October 2007. The UK Automotive Sector Sustainability Report shows the signatories reduced their overall CO2 emissions by 30 per cent and CO2 per vehicle produced in the UK, fell 41.7 per cent in five years. The full report can be downloaded free from

The automotive sector is a relatively minor emitter in terms of the EU ETS – about 0.2 per cent of the emissions covered – but the published proposals move to auctioning of allowances could cost European motor companies up to €3bn when it comes into force in 2013. This is at a time when the industry already faces significant and rising cost pressures.

‘The British motor industry has an enviable record on carbon reduction performance – making significant reductions over the past five years – and it remains committed to continuous improvement. However, competitiveness of the manufacturing sector, in particular automotive companies, must be maintained,’ said Paul Everitt, SMMT chief executive. ‘Tough trading conditions and fierce competition from manufacturing sites outside of the EU, means any additional costs imposed through a further carbon reduction scheme could impact heavily on industry.’

It should be noted that automotive manufacturers in the UK are already largely covered by the Climate Change Agreements1 which have helped focus boardroom eyes on energy efficiency and its role in carbon reduction.

SMMT hopes this latest EC Directive will offer the UK manufacturing industry some clarity on how the next stage of emissions trading will take shape. The automotive sector will continue to engage with Brussels and UK government to ensure the thriving automotive manufacturing sector remains a key contributor to the economy, while remaining a clear leader in providing sustainable solutions for climate change issues.2


1. Entering into Climate Change Agreements offers the opportunity to save 80 per cent of a Climate Change Levy on eligible energy use. Areas covered are generally those in the scope of Pollution Prevention and Control Regulations eg boiler houses and paint shops

2. At €20 bn, the automotive sector is Europe’s largest investor in R&D, driving industry forward and helping deliver more sustainable motoring for the 21st century. Technological innovation has helped car and CV manufacturers slash CO2 and air quality emissions from vehicles. New diesel cars for example emit 95 per cent less soot from the tailpipe than those made 15 years ago and average new car CO2 has been cut by 12 per cent since 1997

Each vehicle made in Britain requires half the energy to produce than it did just five years ago, saving an estimated 700,000 tonnes of CO2 a year. Total combined waste to landfill down by more than half, from 80,399 tonnes in 2000 to 39,862 tonnes in 2006. For more details, download SMMT’s eighth annual Sustainability Report from the SMMT web site

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