April 11,2005

Ottawa-auto sector MOU defines actions for reducing GHG emissions by 5.3 Mt by 2010

Canadian automakers last week signed a Memorandum of Understanding (MOU) with the federal government, voluntarily committing the industry to reduce greenhouse gas (GHG) emissions from new light-duty vehicles in Canada by 5.3 megatonnes (Mt) by 2010. The MOU on climate change action focuses on immediate action to achieve GHG reductions and provides a cost- effective solution for government, industry and consumers.

The voluntary agreement encompasses all major companies in Canada's automobile industry and covers all GHGs relevant to the industry, specifically carbon dioxide, nitrogen oxides, methane and hydrofluorocarbons (as well as other Kyoto Protocol gases equated to a CO2 equivalent value).

To achieve the government's GHG reduction objective for the sector, the Canadian auto industry will concentrate its efforts on introducing to the Canadian market a diverse range of fuel-saving and GHG-reducing vehicle technologies, such as hybrid powertrains, cylinder deactivation technology, advanced diesel technology, and other emerging technologies.

In addition, the industry will continue to pursue design and engineering improvements without compromising vehicle-occupant safety, while at the same time bringing forward technologies designed to promote more fuel-efficient driving behaviour. Research and development will be supported in areas such as lightweight materials, alternative fuels, hydrogen fuel cells and infrastructure, and other advances.

The MOU includes a series of interim GHG emission reduction goals: 2.4 Mt in 2007, 3.0 Mt in 2008 and 3.9 Mt in 2009. These, along with the final reduction goal, will be measured against an updating of the work of the 1999 Government Transportation Climate Change Table and its projections for vehicle-related GHG emissions, as well as NRCan's "Canada's Emission Outlook: An Update, December 1999."

A joint industry-government committee will be formed within the next 60 days; its first task will be to prepare a formal mandate and operational plan for approval by both parties. This is to be done within a 180-day period. In addition to providing technical analysis and advice, the committee will monitor progress toward the interim and final goals, reviewing GHG emissions data and making annual public reports on industry performance. The MOU also provides for professional third-party assessment of internal and external factors which may affect the measures for achieving the industry's GHG reduction goal.

In support of the government's climate change objective, the industry will also work to enhance public understanding about what individuals can do to reduce GHG emissions, and will support positive consumer and driver behaviour with regard to the purchase, maintenance and operation of cars and light-duty trucks across Canada. The industry will continue work with the government and fuel providers to ensure that appropriate fuels, including alternate fuels, are available.

The MOU builds upon the industry's achievements to date in reducing smog-causing, vehicle-related emissions. New Tier 2 emission vehicle technologies now entering the market are expected to reduce smog-causing emissions by 99% from pre-control levels. These standards will, for the first time, apply equally to both passenger cars and light duty trucks, including sport utility vehicles (SUVs).

The MOU was signed at the University of Windsor's automotive engineering facility, Auto 21, by John Efford, Minister of Natural Resources Canada; Ford of Canada president and CEO Joe Hinrichs, who also heads the Canadian Vehicle Manufacturers' Association; and Mercedes-Benz Canada president and CEO Marcus Breitschwerdt, head of the Association of International Automobile Manufacturers of Canada.

More information is available from Mark Nantais, president of the CVMA, 416/364-9333, or from Adrian Coleman of the Association of International Automobile Manufacturers of Canada, 416/595-8251, ext 25.

Aspects of the MOU were criticized by Pollution Probe as weakening the plan. Executive director Ken Ogilvie observed that it provides no accountability or consequences if the GHG emission reduction targets are not achieved. Also, the MOU contains an escape clause that allows either Party to terminate the MOU if it is "no longer desirable."

"Public transparency for an agreement this important to Canadians is essential," Ogilvie noted. Third-party verification of the GHG reductions claimed by the auto sector should be mandatory, not to be done "as necessary," as stipulated in the current agreement, he added.

Pollution Probe is calling for the federal government to initiate a publicly transparent process to design a mandatory fuel efficiency standard for the auto sector. The standard would ensure the significant reduction of greenhouse gas (GHG) emissions and have real consequences for not achieving the target. A report recently published by the group outlines options for developing such standards and demonstrates the feasibility of making significant GHG emission reductions by the auto industry (ELW March 21).

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