Posted on April 26, 2014.
[This is an extract from an article that first appeared on the ‘Detroit News’
website – by David Shepardson]
The Environmental Protection Agency disclosed Chrysler Group LLC, Daimler’s Mercedes-Benz and Fiat’s Ferrari unit bought energy credits from other automakers in the 2010-2012 model years to help meet greenhouse gas emissions limits.
At the same time, Honda Motor Co., Nissan Motor Corp. and electric vehicle startup Tesla Motors Inc. sold credits. EPA doesn’t disclose the amount paid for the credits.
Starting with the 2012 model year, automakers must dramatically hike fuel efficiency to a fleetwide average of 54.5 mpg — about double the prior requirements — and cut average greenhouse gas emissions nearly in half. EPA’s greenhouse gas rules have been issued in tandem with the National Highway Traffic Safety Administration’s corporate average fuel economy program.
Since 2009, automakers have been able to earn credits toward meeting the 2012 requirements — through performing better than the required efficiency, building improved air conditioning systems that reduce emissions or building flexbile fuel vehicles that can also run on mostly ethanol. Credits are awarded per vehicle and calculated in “megagrams” — equal to 1 million metric tons of greenhouse gas emissions.
For the 2010 model year, Honda sold 90,000 “megagrams” credits and Ferrari bought 90,000 credits, while Tesla sold 35,580 credits and Daimler’s Mercedes-Benz unit bought 35,580. For the 2011 model year, Nissan sold 500,000 credits and Chrysler bought 500,000 credits. Daimler is a part-owner of Tesla. In total, Mercedes bought 477,713 credits — including 250,000 from Nissan and 177,941 from Tesla in 2012.
The EPA also disclosed that three small manufacturers — Aston Martin, Lotus and McLaren — were exempted from the 2012 rules, but may be required to take part in future rules.
Ferrari spokeswoman Krista Florin said the automaker “views compliance with environmental requirements as an important aspect of its business.” The automaker is working to boost fuel efficiency while also improving performance — something it said is “demonstrated by the new California T — superior performance matched with significantly improved fuel efficiency.”
The Alliance of Automobile Manufacturers — the trade group representing major automakers — noted that the Obama administration has estimated the costs to the auto industry of complying at more than $200 billion over the 14-year program. The program “recognizes the lead time needed for major vehicle changes” — and noted deficits in one year can be offset by a credit in another.
Ferrari, which is owned by Fiat, petitioned EPA to be classified as operationally independent, and EPA granted this status to Ferrari. That means Ferrari has the same options as the three small volume manufacturers and can petition for a conditional exemption. “Ferrari was successful in purchasing a sufficient volume of credits from other manufacturers to offset their 2012 model year deficit,” the EPA said.
At the start of the 2013 model year, automakers had 230 million banked credits — with Toyota holding 93.4 million after earning another 13.1 million in 2012. Honda was second with 43.3 million banked and GM third with 27.4 million. Ford was fourth with 19.6 million. Nissan with fifth with 16.6 million — even after it had sold some credits. Chrysler saw the biggest fall in total credits in 2012 of any automaker dropping 1.9 million to start 2013 with 7.7 million in the bank.
The only automaker to have a negative balance was Jaguar Land Rover, which started 2013 with minus 424,000 credits. Automakers can run a deficit in a year but then must make it up in future years.
