European car manufacturers argue that the introduction of mandatory CO2 emission limits as of 2012 would detrimentally affect the competitiveness of the European automotive industry. A strong target would significantly raise the industry’s compliance costs and affect the car market by increasing the price for new cars, by reducing customers’ demand, and last but not least result in job losses.

Evidence of past policies, the evaluation of the scientific assessment of the current policy and close scrutiny of the car industry’s previous lobbying efforts suggest that this is only one of many scenarios that repeatedly overestimates the compliance costs for the car industry.

This report provides information on this by:

• examining several cases of previous EU policy-making in the field of environmental policies. These cases are similar to the current conflict between large benefits for the environment and the compliance costs for the industry. We review the predicted compliance costs and relate them to the actual outcomes of the policies. Past evidence shows that the industry has repeatedly overestimated the compliance costs when lobbying against environmental policy-making.

• looking at the estimated consequences of the current proposal, which intends to reduce CO2 emissions. While several impact assessment studies exist, we highlight the research design of the different studies and their major predictions for comparative reasons.

Finally, we summarise some findings on the future market trends in the (fuel-efficient) automotive sector. Fuel-efficient cars are a necessary step in reducing CO2 emissions since they consume less gas and emit less CO2 per km. But the level of knowledge about fuel-efficient cars is relatively low. The current situation is characterised by a severe information deficit on the side of car dealers and customers.