Select Committee on Environmental Audit Minutes of Evidence


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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