EU waters down car emissions limits despite Volkswagen scandal

European countries have unexpectedly granted carmakers additional leeway to bust EU rules on harmful emissions, confounding expectations that they would agree to a tight framework in the wake of the Volkswagen scandal.

In a vote in Brussels on Wednesday, the 28 member states watered down proposals for a new testing framework that would crack down on techniques used by carmakers to doctor emissions results.

The move will increase perceptions that the EU takes the emissions issue less seriously than the US. It was the US Environmental Protection Agency that exposed Volkswagen's cheating by probing the same kinds of discrepancies in car performance that the EU had known about for years. The agency last month ordered the recall of 482,000 VW vehicles and warned the company it could face huge fines for cheating tests.

Countries such as France and Spain argued that the European car industry needed more time to meet targets for hazardous nitrogen oxides (NOx) that exacerbate heart and lung diseases. Only the Netherlands voted against the measure, according to people briefed on the vote.

The decision stipulates that manufacturers will be allowed to exceed legal levels of NOx by 110 per cent between September 2017 and the start of 2020.

After that, the motor industry will be permitted to exceed the legal limit by 50 per cent indefinitely, although that will be subject to a review clause.

That timeframe would apply for new models of cars. The rules would be introduced on a longer timeframe, to January 2021, for new registrations of existing car models.

"I would have preferred that we had gotten even tougher rules, but there was not enough support for that today," Danish environment minister Eva Kjer Hansen said. But she added that the decision was still a "big step in the right direction". Some car manufacturing countries had been pushing for the new test requirements "to be introduced long after 2020", she said.

The Volkswagen scandal has exposed the pressure on EU policymakers to protect diesel technology, which has become the mainstay of the European industry. Many European nations offer generous subsidies to diesel, in the form of tax breaks for diesel-guzzling company cars and low duties on the fuel.

- (Copyright The Financial Times Limited)