A ‘Made in Canada’ fuel standard?

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Source: GLOBE Foundation

The government's decision to introduce new fuel economy standards that at least match recent US standards of 35 miles per gallon by 2020 has been criticized by both automakers and environmental groups alike. The auto industry feels the standards are too high and too soon; while some environmentalists believe they are not high enough and the process of curtailing auto emissions is moving too slow.

In December 2007, U.S. President George W. Bush approved a law requiring automakers to increase the average fuel economy of their entire fleets by 40 per cent by 2020. Under the new legislation, motor vehicles would be required to meet an average 35 miles per U.S. gallon (6.7 L/100 km) within 12 years.

On January 17, 2008 Federal Transport Minister Lawrence Cannon announced that Canada, as a minimum, will be matching the new U.S. standards. The current average for new cars and light trucks is approximately 8.6 L/100 km (27 miles per gallon) in Canada.

'We welcome the U.S. goal, but are committed to developing made-in-Canada standards that achieve - at minimum - that same target in Canada,' Cannon said at a press conference at the Montreal International Auto Show. 'We want to make sure...that it is a Canada-made standard and that it will be the most stringent, dominant standard in North America.'

Cannon announced a 60-day consultation period to discuss the fine details of the plan during which time the federal government will meet with stakeholders in the auto industry, environmental groups, and with provincial and territorial governments.

Many in the auto industry believe meeting the standards will be financially difficult. General Motors stated that the 35 mile per gallon standard would add $6,000 to the price of its vehicles sold in the United States.

However in Europe the current fleet-average requirement is 40 mpg and according to MIT's Technology Review website, Japan will require 47 mpg by 2015. The U.S. Union of Concerned Scientists has stated a 40-mpg standard would save at least $2,200 in fuel bills during the lifetime of a car.

'Constant delay already means that North America is 15 years behind Europe and Japan in regulating fuel efficiency standards,' said Jean Langlois, National Campaign Director at the Sierra Club.

Some Canadian provinces, including Quebec, Manitoba and British Columbia are leaning towards more stringent vehicle emission standards, similar to those proposed by California which could get the US to 35-mpg as early as 2016.

California's proposition, which would force automakers to reduce greenhouse gas emissions by 30% by 2016 - requiring fuel efficiency of 40-mpg by 2020 - was blocked in December 2007 by the US Environmental Protection Agency. The move led California and 15 other states to sue the EPA in a bid to force the agency to review its decision whoever the EPA has refused to budge on its decision.

'We prefer the California standard. We feel that we have to push forward on that,' Quebec Premier Jean Charest said in Sherbrooke, Quebec on Thursday. 'It is the transport sector in Quebec that produces the most greenhouse gases.'

In the 2007 throne speech BC Premier Gordon Campbell promised - starting in 2009 - all new cars sold in British Columbia would require the California standards. Campbell has made it clear that reducing automotive emissions is an integral component of the province's climate change plan to reduce greenhouse gas emissions by 33% by 2020.

Not all parties are opposed to the Canadian plan and some industry members believe it is a step in the right direction. Because the car industry is so heavily integrated across the border some believe it is essential, for Canada to match the U.S. standards. 'It's a good idea to follow the models that are set up elsewhere, because economies of scale are important, you don't want to be a small market on your own,' said George Iny, president of the Automobile Protection Agency consumer group, which has welcomed the move, saying also that stringent fuel economy rules will benefit all drivers.

Iny noted important details need to be sorted out during the 60 day consultation period for the fuel efficiency plan to work. Questions remain, such as timing, whether certain classes of vehicles will be exempt, and whether ethanol mileage might count, even though the alcohol-based additive is not widely available in Canada.

No matter what the government decides beyond the 60 day consultation, profound changes are looming in the future of the automotive industry. Many of these changes will be discussed at the inaugural Auto FutureTech Summit 2008. The summit is scheduled to take place March 12 to 14, 2008 in Vancouver and more details can be found here.

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