from the NP
New rules that kick in next year governing vehicle emissions in Canada and the United States will likely mean higher sticker prices for consumers and production costs for manufacturers, Environment Minister Jim Prentice said Thursday.
Nevertheless, he hailed the new continental-wide plan as "ambitious but achievable." And in a wrinkle, the new regulations include an industry-specific emissions-trading scheme under which car makers that don't meet the tough new standards can buy credits from rivals that have. The credits will initially cost $20 per tonne of carbon, and the price will fluctuate with market demand, the Minister said.
Auto industry officials said the program is "aggressive," but at least there is now certainty as to what the near-term rules will be. Plus, a continental-wide regime will allow companies to keep a lid on the cost of vehicle development, because the same rules will apply in both countries.
"Everyone agrees there's going to be a cost implication to this," said David Adams, president of the Association of International Automobile Manufacturers of Canada, which represents Honda Motor Co. and other overseas-based companies. "This is one of the most important announcements for our industry in a long time."
Other industry observers were not so charitable.
"The reality is that it is impossible to meet these new fuel efficiency rules, pure and simple," said Dennis DesRosiers, head of DesRosiers Automotive Consultants of Richmond Hill, Ont., adding the measures are the "most negative piece of regulation ever to hit" the industry.
The measures, unveiled Thursday at an Ottawa-area Ford dealer, apply to any company that either builds or sells cars in Canada, beginning with the 2011 model year. They will force each automaker to achieve a combined average fuel economy for all the models it sells of 35.5 miles per gallon by 2016. That is equivalent in Canada to about 6.6 litres of gasoline usage for every 100 kilometres driven.
Greenhouse-gas emission standards would become more stringent with each new model year from 2012 to 2016. Further, there would also be separate limits for other tailpipe emissions, such as nitrous oxide and methane.
"Yes vehicles will cost a little more upfront, but the money they save on fuel should make up those extra costs," Mr. Prentice said.
Similar measures were also unveiled in Washington. The U.S. Environmental Protection Agency has estimated they will boost the price of cars and trucks by an average of US$1,300 per vehicle. However, it claimed that would be offset by about US$2,800 in fuel costs over the life of the car or truck. Other estimates on the cost are two or three times higher.
Mr. DesRosiers, however, said it generally takes "at least eight years to implement any new technology in this sector and the normal implementation period is closer to 16 years. So even if the technology existed, which it doesn't in any way shape or form the 2016 goal could not be met."
Mr. Prentice had frequently said it was his preference to introduce vehicle-emission standards that were in line with the U.S., the country's largest trading partner. These are the first mandatory rules for vehicle emissions in Canada, which in the past preferred voluntary guidelines.
"I wouldn't use the word 'happy' to describe how we feel about this," said Mark Nantais, president of the Canadian Vehicle Manufacturers' Association, which represents General Motors Corp., Ford Motor Co., and Chrysler Group LLC in Canada. "These are really aggressive standards. But it does give us the clarity we need for the next five years and allows us to properly put the resources where we need them to deliver the technologies needed to comply."
It was not immediately clear if the provinces of Quebec and British Columbia would adhere to the new federal standard. Both provinces have signalled they intend to regulate vehicle emissions themselves. Mr. Prentice said he was hoping to work with the provinces, with the hope that "there will be good will to ensure all of Canada will see the wisdom of these regulations on a continental basis."
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http://www.financialpost.com/story.html?id=2752609#ixzz0jsmIDPI7I guess that pickups will be omitted from the vehicles that have to get in the average so there will still be 6 litre pickups around for those that insist.
Time to start looking at preowned cars I guess.
