BELGIUM: October 16, 2008


BRUSSELS - Italy is close to backing a French plan to phase in European Union curbs on greenhouse gas emissions from cars by 2015, leading to a united front among car-making nations, sources in the talks said on Wednesday.


The deal would delay full introduction of the executive European Commission's proposed limits by three years and lower the punishment for non-compliance, angering environmental campaigners.

The Commission proposed legally binding cuts on carbon dioxide output from cars of 18 percent to 130 grams per km by 2012 as part of an ambitious plan to lead the world in fighting climate change, with stiff fines for offenders.

The EU executive hopes a further 10 grams will be removed through better tyres, fuels and air-conditioning.

"Italy is now ready for a compromise on the basis of the French proposal," said German Conservative lawmaker Werner Langen, who is representing the European Parliament in the negotiations.

The backing of Italy, home to carmaker Fiat and its luxury Ferrari division, would create a united front with France and Germany, which have already reached an informal accord.

Italy, which specialises in lighter, less polluting cars, had previously complained that France and Germany were dominating the negotiations and bending draft rules to favour their heavier marques such as BMW and PSA Peugeot Citroen.

An Italian government source told Reuters: "The French proposal contains all the elements to reach agreement, but we're not there yet."

Last month, France proposed phasing in CO2 cuts by 2015, with a banded system of fines including low penalties for manufacturers that just miss their targets.

The source said Italy wanted the fines for those that narrowly miss their targets to be reduced further to 15 euros per gram of CO2, compared to 25 euros proposed by France.

"It is impossible to predict how successful different car models will be each year -- you might sell more big cars if that model is especially successful -- so penalties should not be high for producers close to their targets," said the source.

Any agreement among member states would still face a hurdle winning approval from EU lawmakers before it is adopted.

The environment committee of the European Parliament, which shares legislative power with member states, last month rejected a similar swathe of changes to those proposed by France, saying they were too soft on the auto industry. (Reporting by Pete Harrison, editing by Paul Taylor)


Story by Pete Harrison and Ilona Wissenbach


REUTERS NEWS SERVICE