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Keynote speech at the Annual reception of CLEPA, the European association of automotive suppliers

Connie Hedegaard

Brussels, 26 February 2013

Check Against Delivery

Ladies and Gentlemen,

European industry in general and the automotive sector in particular, is today facing numerous and significant challenges. The severe economic downturn, unemployment and increasing competition from third countries add pressure to an already challenged European industry. At the same time, unfortunately, the climate crisis did not disappear all by itself. In this changing world, we want the EU to become a smart, sustainable and inclusive economy. These three principles underlie the Europe 2020 Strategy, the EU's growth strategy for the coming decade. The Strategy is about delivering growth which is 'smart' through more effective investment in education, research and innovation; 'sustainable', thanks to a decisive move towards a low-carbon and resource-efficient economy; and 'inclusive', with a strong emphasis on job creation.

I know that CLEPA and its members are firmly committed to the ever challenging battle for true competitiveness. By focusing your investments on innovation, on environmental protection, on sustainability, energy efficiency, social responsibility, safety and skills -development you match perfectly the future that we picture in the Europe 2020 Strategy.

And that is why I believe in a strong, competitive European automotive industry, also in the future.

The role of the automotive industry in research and development is crucial. The automotive supply chain invests an impressive €15 billion per year in research, development and innovation.

European funds provide a substantial leverage to the EU automotive industry. The EU recognises that the industry needs to finance simultaneously the research, development and innovation on several powertrain technologies. This includes the continuous improvement of conventional engines as well as the development of electric, fuel cells and hybrid powertrains.

And we can see tangible results of this significant investment effort. When we look at the improvement in new cars' fuel efficiency since 2007, (the year of the implementation of the EU strategy), we clearly see significant progress. The average CO2 emissions of the new fleet have dropped from some 160 gCO2/km in 2007 to 135 g/km in 2011.

The supply of more efficient vehicles, be it vehicles with advanced conventional engines or alternative powertrains, is continuously increasing. This would not be possible without a significant effort of the automotive suppliers where these innovative technologies are designed and developed.

Does that mean that we in Europe, you as a sector, can rest on our laurels? Not exactly!

The Commission wants you to maintain this effort. As you all know, the Commission's proposal for the Horizon 2020 programme on research and innovation for 2014-2020 foresaw a significant increase in comparison to Framework Programme 7. The proposal also considered that automotive research and innovation funding should be proportionate to its economic and social importance.

Even though the Heads of States agreed this month to lower the proposed funding for Horizon 2020 to €63 billion, it still represents a huge increase from the 2007-13 budget. It is clear to me that research and innovation should certainly remain a priority in the future EU budget.

Funding is however only one way of spurring innovation. Regulation on promoting new, less energy intensive vehicle technologies, which deliver lower CO2 emissions, is another key tool for supporting innovation in the sector.

The policy framework that we have in place includes CO2 emission standards for new cars and vans. These Regulations and the proposals to implement the 2020 targets currently discussed in the European Parliament and in Council represent a multiple win for the EU and bring various benefits:. They are good for consumers, good for GDP, good for employment, and good for energy security. In addition they bring very substantial CO2 reductions.

Even at current oil prices of around $100 per barrel, every tonne of CO2 saved by the current proposals to amend the Regulations comes at a net saving to society of €110 or more. This is clearly a good thing for society. Therefore it's hard to see why anyone would wish to weaken such a bonanza through increasing flexibilities like super-credits.

Of course these benefits don't come without effort. We need the automotive sector to innovate to deliver the new technologies at affordable costs for consumers. But you – the industry – tell us you can deliver. We understand that – provided the pace is reasonable – you have the technologies available or under development to not only meet the 2020 targets but to go substantially beyond it.

We have said that we will also look at the Heavy Duty Vehicle sector where it is clear that there are negative cost CO2 savings to be achieved. Of course, we should harvest these savings.

Remember: The EU is not alone in taking such action. CO2 and fuel economy standards have been developed in the world's biggest automotive markets (EU, US, Japan, China, South Korea, Australia). While the ambition of standards differs it is clear that there is a downward trend and that these standards are converging. This is why the current economic downturn should not distract the automotive industry from innovation which will ultimately enable it to regain its competitiveness once the global economic outlook improves.

Finally, Ladies and Gentlemen,

While the EU Car and Van Regulations include targets up to 2020, we will soon have to prepare for the period beyond 2020. The Low Carbon Economy Roadmap and Transport White Paper clearly show a downwards emission path towards reaching our 2050 objectives and road transport is expected to play an important role in this reduction effort.

I see no reason to unnecessarily postpone this discussion, once we have agreed the present proposal.

The Commission is therefore currently working on a consultative Communication on this topic to be published later this year. This Communication and the subsequent discussion will be an important step towards providing long-term planning certainty. It will launch the necessary debate on how to best shape the post-2020 regulatory framework and what the level of ambition of such a framework could be.

But obviously we need your input, your knowledge. We need you to develop the key technologies that lead towards lower emissions per kilometre and thus reduce transport’s overall climate impact.

So far you have delivered – to the benefits of all of us – to the benefit of the climate.

I look forward to continue the constructive dialogue with you.

Thank you!

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