New EU proposals to reduce pollution from cars could lead to huge increases in the price of four-wheel drive vehicles and cars with large engines by 2012.
The proposals, from the EU's environment commissioner Stavros Dimas, were revealed in the wake of a major new initiative by the EU last week to stem global warming and reduce air pollution and they may well affect the price of smaller cars both here and across Europe.
One estimate puts the number of cars currently being sold in Europe that are capable of meeting the new emission requirements at less than 5 per cent. Mr Stavros says he wants mandatory limits on the amount of carbon dioxide that an average car can produce capped at 120 grams per kilometre.
At the moment, virtually every car sold in Ireland exceeds that limit and some cars produce up to and over three times the limit. The EU has aimed for this reduction for some time - since 1995 in fact - and had hoped it would be introduced in the next three years but it has been on the basis of voluntary reductions by car manufacturers.
"This is one very good example of how self-regulation does not work. The industry has not responded as it has been asked to, and now the solution will be forced on it. It will be in the form of taxes on new car sales and there is not a lot the companies can do about it. The days when the EU was controlled by big car-producing countries are gone. The EU is a changed entity and the environment is perhaps the biggest challenge now facing it," said one EU official.
The proposals are due to be debated within the EU in the coming months and the legislation introduced by the end of the year, but most commentators believe serious resistance will be overcome.
"I would like to see someone try to seriously argue against these proposals because they are not just necessary but they are popular too. It is the car companies who will have to answer for their cars costing more," said the same official.
The car industry is being given a get-out clause, however. The Commission intends to allow companies average out their emission levels on their model ranges. Thus Toyota, for example, would be in a position to argue for the retention of the Lexus 430 (the 430 has a 3-litre engine and produces 270g of carbon dioxide) because the rest of its cars produce much lower levels on an average calculation.
However, it's likely the industry will still struggle to meet the limits. Many cars currently are well beyond the 120g limit. A Ford Mondeo 1.8-litre car with a Duratec petrol engine rates at 184g, according to the British government agency which monitors fuel consumption and exhaust emission figures. A Fiat Punto with a 1.2-litre petrol engine produces 136g, a 1.2-litre petrol Skoda Fabia produces 144g, while a 1.4-litre petrol VW Golf produces 166g.
No figure has yet been put on the rate of tax that would be levied on cars like four-wheel-drives and sports cars, but with the current Range Rover Sport producing 374g per kilometre and a Porsche 911 producing 266, the penalty is likely to be severe. "It's not an anti-democratic move. Manufacturers can't simply go on offering people anything they want, to pollute as they want, and car buyers will just have to listen to common sense. I don't think it will be a cheap tax," said the EU official.