Examination of Witnesses (Questions 40-59)
24 MARCH 2004
MR PAUL
EVERITT, MS
KATHERINE BENNETT
AND MR
MIKE HAWES
Q40 Chairman: A lot of our questions
will be to do with CO2 emissions, can I just ask you about HFCs,
which has been a live issue in the European Parliament recently.
I understand that your industry lobbied against the controls the
European Parliament was seeking to replace HFCs, particularly
their use in air-conditioning systems in cars.
Mr Everitt: We were not lobbying
against the restrictions on the use of HFCs we are looking for
a Directive which is workable and implementable.
Q41 Chairman: Would it not be simpler
for them to be banned?
Mr Everitt: One of the points
we make is over the time period which that ban should come into
effect. I do not think we have tried to suggest there should not
be a ban. I think it is fairly interesting that the United Kingdom
Government cost-benefit analysis indicated that improvements to
systems reducing leakage rates was by far the most environmentally
productive route rather than an outright ban. As an industry the
difficulty we face at the moment is there is no ready-made alternative.
There are a number of different systems which vehicle manufacturers
are in the process of testing and developing which we believe
we can bring on stream in a reasonable time period.
Q42 Chairman: What is a reasonable time
period?
Mr Everitt: I think we are looking
at a period of a ban from 2012.
Q43 Chairman: It has been suggested that
if you are saying 2012 you can do it a lot easier and faster than
that.
Mr Everitt: I think you will find
traditionally there is always this particular debate that goes
on between those who think everything can be done very quickly.
If we were talking about one vehicle or even ten vehicles going
on to the roads I am sure that would be the case. I think people
have to remember that these systems are going to be fitted to
millions of vehicles. They also have to be assured that when those
vehicles are involved in collisions and accidents that the performance
of materials and the components are not going to create a worse
problem than the ones we already have.
Q44 Chairman: Are HCs no good?
Mr Everitt: Sorry?
Q45 Chairman: Are HCs an alternative?
Mr Everitt: I am not an expert
in this particular area. There are a range of alternatives which
we are looking at and also individual companies are developing.
We believe there are ways in which we can replace those gases
and we are keen to do that. What we are asking for is over a reasonable
time period and in a manner that can be befitted into the normal
production cycle of new models.
Q46 Chairman: Is there any way the Government
could help achieve the objectives which you stated that you want?
Mr Everitt: I think the Government
has been reasonably supportive in the discussions and debates
that have gone on at a European level. I am not really certain
there is a great deal more given the nature of this particular
legislation and the fact that the systems that are being developed
are being developed certainly as a minimum on European level,
and indeed in most cases global level. I do not think one individual
Member State can make that much difference.
Q47 Chairman: It would probably help
if they did announce these things were going to be banned on a
given date, that would give you the sort of certainty you were
asking for earlier.
Mr Everitt: It would not make
a great deal of difference. One of the key issues and one of the
key debates in the Directive is the legal basis under which it
is introduced. For us as a global industry working across a European
market it is not very helpful if individual Member States take
a different approach.
Q48 Chairman: That is understood. Coming
on to CO2 and the voluntary agreement which was introduced in
1998, the latest data we see suggests that progress and meeting
targets set for the voluntary agreement is petering out.
Mr Everitt: The EU agreement,
as you said, was signed in 1998, within the agreement there were
a number of interim milestones, one was the availability in 2000
of a vehicle with a performance of less than 120 grams per kilometre,
the second was by the end of 2003 the average new car emissions
should be between 175 and 165 grams per kilometre, the latest
monitoring data from the EU is at the end of 2002, and I think
it is 165. That would mean that we have met the two interim milestones
and I think from our point of view we feel we are on target. We
would not under-estimate the challenge which lays ahead of us
because there are a range of constraints which we face but I think
broadly speaking we are on track.
Q49 Chairman: The 2010 target is 120
grams of CO2 per kilometre?
Mr Everitt: The European one.
Q50 Chairman: The EU one. Do you think
you can hit that?
Mr Hawes: It is a 2012 target
of 120 rather than 2010.
Q51 Chairman: Are you going to get that?
Mr Hawes: We are looking at it.
It is going to be great challenge to reduce from 140 in 2008-09
down to 120. You have to reduce by an average of five grams per
kilometre per year. That is a schedule which will be extraordinarily
difficult to meet. We are looking to see how progress is developing
and what other technologies are going to help us deliver that.
Q52 Chairman: Are there technologies
around which will enable you to do this?
Mr Hawes: There are a wide range
of technologies varying from hybrids to producing cleaner diesels
to alternative fuels like LPG and CNG.
Mr Everitt: We have an agreement
which covers the period to 2008-09 which we are focused on. The
European Commission is opening discussions and debate on the period
after 2008. The focus that we have is to ensure that the discussions
are taking into account the economic well-being of the industry
as well as the environmental objectives.
Q53 Chairman: The United Kingdom seems
to be lagging behind the rest of the EU in terms of meeting targets,
is there a particular reason for that?
Mr Everitt: The target is pan-European
it is not split nation by nation.
Q54 Chairman: The individual performances
are visible in data and the United Kingdom is doing worse than
the rest of Europe, is that because we have bigger cars?
Mr Everitt: We have to recognise
where we started from, when the agreement started we were probably
ranked fourteenth or fifteenth of the EU Member States and we
have actually improved our performance at a slightly faster rate
than some others. The historic make up of the car and purchasing
trends in individual markets will have an influence. I think we
feel we are making significant progress in the United Kingdom.
Q55 Mr Challen: One of the tables which
was missing from the Budget book was the one which shows that
road transport carbon emissions rising and worryingly are forecast
to continue rising, would you accept this represents a very serious
threat to the prospect of us meeting our domestic target of a
20% cut in carbon emissions by 2010?
Mr Everitt: Our view is that carbon
emissions from road transport, from passenger cars will turn down.
Q56 Mr Challen: When do you think that
will happen?
Mr Everitt: Over the course of
the next five to ten years I would be fairly confident that will
be the case. Clearly the United Kingdom's domestic target is much
broader than just the road transport sector. We as an industry
feel that through the voluntary agreement and the commitment we
have to introducing new technologies it will make a substantial
contribution to achieving the EU Kyoto target and also the United
Kingdom domestic target.
Q57 Mr Challen: This sounds a little
vague, I am just wondering if there is an element of crossed fingers
there, what are the key elements which make you confident you
will achieve these targets in five to ten years' time, even before
2010 possibly?
Mr Everitt: We are seeing lower
and lower emission vehicles being put on to the market. There
will always be an element of doubt. This is one of the key points
I was trying to make in the opening, this is a long-term project
both for society and industry. We are talking about a very long
period of time. If there is always a focus from year to year where
you do not seem to be doing very well you need to change something
and it does not create a stable environment where businesses can
invest in the types of technology and in the types of products
which will help achieve the goals we are trying to meet.
Q58 Mr Challen: In the voluntary agreement
and in the 10 Year Plan for Transport that envisages a four million
tonne of carbon reduction from the United Kingdom, are we on target
for that reduction?
Mr Hawes: I think if you look
at the various targets we have they are all reading in the one
direction, we are all obliged to introduce technology to which
the market will respond and help us deliver those. The indication
is that we are on track for the 140 and that target will be complementary
to some of the other targets.
Ms Bennett: The other point to
bear in mind is that cars have a lifetime of between possibly
ten to 12 years, there is always going to be a time lag before
the impact takes over. As Paul was saying we build the car but
we need the customers to buy them, it has a knock-on effect in
that way as well.
Q59 Mr Challen: The Powering Future Vehicles
Strategy set a target for 10% of new vehicles to emit less than
100 grams per kilometre by 2010. Are we on target to meet that
target?
Mr Everitt: We have to look very
closely at that particular target. It is important to say—and
we will come back to this as a continual theme—we are not
a single United Kingdom market, we are a European market. To some
degree the technology and the thrust of an individual company
is going to be more geared towards a general 140 target that is
part of the European agreement. Generally that is not inconsistent
with the 10% target. The difficulty or what we need to be sure
about as we move forward is that what we do not end up with is,
if you like, a very small niche of vehicles in the United Kingdom
which meet that particular target and the bulk of the rest of
the car is off track. The technologies which we need to introduce
have to work across the vehicle path, across all vehicles we are
selling. As an industry we need to sell the full range of vehicles
in order to generate the revenues that we need to make the investment.
To give you a more direct answer, the 10% target is feasible but
the dominant focus for industry is going to be the European level
agreement.
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