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4th Febuary 2008

Sir Mark Moody-Stuart, the former chairman of Shell, now chairman of the mining group Anglo American, told the BBC R4 Today programme this morning that the EU should ban the sale of new cars that do under 35 mpg, rather than simply tax them. Recalling the London-wide absolute ban on coal fires, he said taxing the use of high-consumption cars simply let rich people avoid taking responsibility for tackling climate change.

Interviewed on the views he had expressed on the BBC News website’s ‘Green Room’ opinion pages, Sir Mark said: "Nobody needs a car that does 10-15 mpg. We need very tough regulation saying that you can't drive or build something less than a certain standard. You would be allowed to drive an Aston Martin - but only if it did 50-60mpg."

The Society of Motor Manufacturers and Traders spokesman Nigel Wonnacott said it was enough that drivers of polluting cars already paid extra through VED (road tax) and petrol duty, but Sir Mark said his years in industry had taught him that the market would provide solutions if governments demanded them with enough conviction, and the EU was “far too lax” with motor manufacturers.

On average, European manufacturers’ products do currently achieve approximately 35 mpg, and the European Commission’s proposal for a fleet-average 130 g/km CO2 tailpipe emissions limit per manufacturer is roughly equivalent to raising each manufacturer’s fuel economy target by around 25%. The maximum fines currently envisaged for manufacturers’ failure to meet the new CO2 limit would impose on Porsche (according to analyst John Lawson of Citigroup, as reported by British columnist Neil Winton in today’s Detroit News), a cost of over £13,000 per Cayenne SUV sold. Porsche is currently developing a hybrid version of the vehicle.

- A new tax which came into force in the Netherlands on Friday 1st February penalising cars that exceed a CO2 emissions limit unspecified by Planet Ark’s report brought forward sales of some high-consumption cars. A Mercedes-Benz Netherlands spokesman said the cost after tax of high-end V8 models could easily increase by up to €10,000.

The Dutch Cabinet agreed in December road pricing on all Dutch roads, differentiated according to time, place and environmental factors, starting with freight transport in 2011 subject to negotiations with neighbouring countries, with passenger cars following a year later.

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