European Commission Legislation Incentivizes Eco-innovation for Cars

25 July 2011: The European Commission adopted legislation providing incentives for the reduction of carbon dioxide emissions from cars through eco-innovation. The Regulation enables motor manufacturers to receive carbon emission credits if they fit new cars with approved "eco-innovations" reducing emissions.

The credits will help the industry meet the European target of limiting carbon dioxide emissions from new cars to an average of 130 grams/km by 2015. Eco-innovations will count for up to seven grams of carbon dioxide per km towards that target.

Under the Regulation, a technology can qualify as an eco-innovation if it is new to the market, contributes to significant carbon dioxide savings and is not otherwise taken into account in determining the level of carbon dioxide emissions from vehicles. The technology should also aim at improving vehicle propulsion or the energy consumption of devices that are mandatory, without compromising vehicle safety.

The Commission will assess applications submitted by car manufacturers and component suppliers and adopt decisions approving generic eco-innovations. The actual carbon dioxide savings from the eco-innovations for each specific car will be certified as part of the vehicle type approval procedure. [EU Press Release]