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EU Agrees New Compromise on Car CO2 Limits

By Barbara Lewis and Tom Körkemeier BRUSSELS (Reuters) - The European Union on Tuesday agreed a compromise to enforce stricter rules on carbon dioxide emissions for EU cars, ending months of wrangling after Germany insisted an earlier deal was torn up.

By Barbara Lewis and Tom Körkemeier

BRUSSELS (Reuters) - The European Union on Tuesday agreed a compromise to enforce stricter rules on carbon dioxide emissions for EU cars, ending months of wrangling after Germany insisted an earlier deal was torn up.

The new outline agreement delays 100 percent implementation of a limit of 95 grams of carbon dioxide per kilometer (CO2/km) for all new cars until 2021 from a previous deadline of 2020.

It also changes the rules on flexibility, giving more leeway to German luxury car manufactures such as Daimler and BMW whose emissions are higher than those of smaller, lighter automakers such as Fiat.

"We have worked together with the European Parliament for limited additional flexibility. Tonight we have found a very delicate balance," said Arunas Vinciunas, the ambassador for Lithuania, which holds the rotating EU presidency.

He added the deal would be presented to a meeting of EU diplomats on Friday, with a view to getting their agreement. It would then have to be signed off by member state governments and the European Parliament.

Provided it is signed into law, it will draw a line under six months of acrimony over what other member states saw as heavy-handed negotiating tactics from Germany.

Chancellor Angela Merkel, whose party received money from BMW, took up the cause of the big German carmakers, declaring she was protecting German jobs, and persuaded other EU states to agree to scrap an agreement on 2020 emissions targets that was reached in June.

GERMAN PRESSURE

Germany has won some of the concessions it sought.

Apart from the phase-in, under which 95 percent of new car sales will have to comply in 2020 and 100 percent in 2021, Tuesday's agreement also changes the rules for "supercredits".

These allow manufacturers that make very low emission vehicles, such as electric vehicles, to claim extra credits for them, so they can continue to produce more heavily polluting vehicles as well.

An agreement reached in June had set a limit for use of supercredits at 2.5 grams per year. Tuesday's new deal sets a cap of 7.5 grams of carbon dioxide for the years 2020-2022, so a manufacturer could opt to use all the flexibility in the first year.

Environmental campaigners, who have strongly criticized the German stance, gave a very cautious welcome to the deal, saying at least it provided certainty.

"It is disgraceful that the heavy-handed lobbying of Germany has paid off in weakening the 95g target," Greg Archer of campaign group Transport & Environment said.

"Still, this revised deal will provide much needed regulatory certainty and ensure cars continue to reduce their CO2 emissions and improve fuel efficiency."

So far Europe has a 2015 CO2 limit of 130 g/km as an average across the EU fleet, a goal many manufacturers are already meeting or very close to doing so.

No-one from the German central government had immediate comment.

Sabine Wils, a member of the European Parliament representing Die Linke, a German left-wing party, said the deal meant hundreds of tons more carbon dioxide would enter the atmosphere and consumers would spend much more on fuel.

(Editing by David Evans)

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