Thursday, 5 March 2009

Hon Hai to Target Green Services, Add China Staff

TAIPEI -- Hon Hai Precision Industry Co., an electronics manufacturing giant, said it will start offering corporate environmental services to customers and that it is expanding its work force in China by 5% despite a global economic downturn that has hurt its sales.
Hon Hai signed an agreement Wednesday with International Business Machines Inc. to acquire technology used to calculate greenhouse-gas emissions from factories and other corporate facilities. Hon Hai plans to use the technology to help customers monitor their emissions and gather data that can be used as a basis for carbon trading.

Hon Hai Chairman Terry Gou said his company plans to invest $100 million to $200 million in developing such software services in the coming years, though Hon Hai will continue to focus on manufacturing.
Mr. Gou also voiced cautious optimism about the global economy, saying: "In the short term, the economy is not as bad as I initially expected."
Mr. Gou didn't give a time frame for the jobs increase in China, where Taiwan-based Hon Hai has most of its factories. Nor did he specify its current work force in China, but he said Hon Hai's global payroll is about 600,000.
Hon Hai, which started out in the 1970s making television tuning knobs, has expanded into a major producer of electronic gadgets, with parent-company revenue last year of about $42 billion, not including all its affiliates. It now manufactures everything from iPods for Apple Inc. to computers for Dell Inc. to videogame consoles for Sony Corp.
Developing new lines of business has become more urgent in the last year, as its revenue began to stall after years of rapid growth. In January, Hon Hai reported its lowest single-month revenue in 20 months. January sales fell 12% from a year earlier, as its international clients cut orders.
Under the new contract, Hon Hai will use GreenCert, a combination of software and other technology jointly developed by IBM, Enterprise Information Management Inc. and C-Lock Technology. It isn't clear what types of clients Hon Hai plans to target, but the service will be first offered in Taiwan, and eventually be expanded to other Asian countries.
Write to Wei Yi Lim at

Fiscal sun shines on renewables groups

By Andrew Ward in Washington
Published: March 4 2009 19:24

Six months ago Blake Jones stopped hiring at his solar energy company in Boulder, Colorado, and was considering dismissing workers.
Growth had been thrown into reverse as the financial crisis choked off financing for renewable energy pro­jects. “Things were looking bleak,” says Mr Jones, chief executive of Namaste Solar.

Today the company’s prospects are suddenly brighter, after the US fiscal stimulus created billions of dollars of subsidies and incentives for “green” energy.
“It’s going to have a huge impact,” says Mr Jones, who gave Barack Obama a tour of a rooftop solar facility in Denver last month before a ceremony to sign the stimulus into law. The president chose to launch the stimulus in Colorado because of the city’s leading role in the US renewable energy sector, which emerged as a big winner in the $787bn (€627bn, £558bn) bill.
With immediate effect, businesses and homeowners will be eligible for a grant of 30 per cent of any investment in renewable energy. A further $7.6bn will come as loan guarantees and bonds.
Jo Elyn Newcomb, general manager of Independent Power Systems, another Colorado-based solar group, says customers are lining up to take advantage and forecasts a 50 per cent rise in business this year.
About $80bn, or 10 per cent, of the US stimulus is dedicated to green measures, including nearly $10bn to make government buildings and low-income homes more energy efficient, $6bn for clean energy research and development, $2bn to manufacture car batteries, and tax credits for people who buy hybrid vehicles and energy-saving home appliances.
Environmental groups are broadly pleased with Mr Obama’s early moves – particularly his promise to press for legislation creating a cap-and-trade system to regulate carbon emissions. But many activists have mixed feelings. Critics say the initiatives will be undermined by other investments that reinforce dependence on fossil fuels, including $27bn for road and bridge building.
Dissent was muted by the inclusion of $9bn for an expansion in environmentally friendly high-speed rail lines and $8bn for other mass transit schemes. But some critics say that, in its haste to create jobs through “shovel ready” projects, the administration missed an opportunity for a more far-reaching overhaul of the US’s carbon-based economy.
Charles Ebinger, an energy expert at the Brookings Institution in Washington, says the most serious flaw was lack of investment in infrastructure needed to support growth in renewable energy. Wind and solar power is most plentiful in the sparsely populated mountain west and Great Plains regions – requiring construction of transmission lines to carry the electricity to faraway cities.
The stimulus included $11bn for power grid investments but Mr Ebinger says several times that amount would be needed to harness the full potential of renewable energy.
On the other hand, critics on the right complain the stimulus went too far.
Jerry Taylor, energy expert at the Cato Institute, a free market think-tank, says if the aim was to create jobs and promote growth, much of the money will be wasted. He argues that, while road building can often be started quickly, many “green” projects need years of development.
Green energy advocates point to a recent study by the American Wind Energy Association that showed the number of people working in the wind power sector increased by 70 per cent to 85,000 in the past year, exceeding the 81,000 people employed in US coal mines.
Mr Taylor says such figures merely serve to underscore the inefficiency of renewable power, given that wind accounts for only 2 per cent of US electricity production. Coal produces half.
Back at Namaste Solar, Mr Jones is preparing to do his bit for job creation, with plans to increase the company’s 55-strong workforce by 11 over the next year.
Copyright The Financial Times Limited 2009

EU to Punish U.S. Biodiesel Exporters

BRUSSELS -- The European Union voted for punitive antidumping tariffs on imports of U.S. biodiesel for six months, according to EU officials, threatening an industry that saw $1.5 billion in sales to Europe last year.
Tuesday's vote by a committee of trade officials from the EU's 27 member states came amid plunging oil prices and growing protectionism around the globe -- though the decision was based on a complaint filed by EU biodiesel producers in July, when oil prices were high and the global economy was healthier.

Europe has been a crucial market for U.S. biodiesel companies because European governments require oil companies to blend biodiesel with regular diesel.
The goal of the punitive duties is to erase the advantage from a U.S. tax credit that industry brokers say allows U.S. exporters to sell biodiesel in the EU for $800 a ton, compared with the average $1,000 charged by EU producers over the past six months.
The duties will amount to $400 to $500 per ton of biodiesel imported from the U.S., EU officials said.
U.S. producers "will get shut out of the EU market while the duties last," says Kevin McGeeney, CEO of Starsupply Renewables SA, a Geneva-based broker. Several of his U.S.-based sellers could go out of business as a result, he said.
U.S. producers have already been hammered by a collapse in crude oil prices that has made biodiesel more expensive to buy than regular fossil fuel, as well by an excessive buildup of plant capacity.
Biodiesel is made from plants such as rapeseed, oil palm and soybeans, or from discarded vegetable oil.
Officials in the U.S. biodiesel industry say they plan to ride out the provisional phase of the high import tariffs. The EU is due to decide later this year whether to extend the duties for a period of five years.
U.S. companies say they hope to get the duties reduced, arguing that the $300 per ton U.S. tax credit didn't injure a sufficient number of European producers during the period surveyed, as required to justify extra duties under World Trade Organization rules. In this case, the reference period in 2007 and 2008 was a time of high oil prices during which most biodiesel companies prospered because biodiesel was cheap by comparison to regular fuel.
"The data in the case show the EU industry has not been harmed by U.S. competition, which is the basis for imposing duties," says Manning Feraci, vice president of the National Biodiesel Board in the U.S. "This is just one step in the process."
European producers complained the tax credit made U.S. biodiesel cheaper than its raw materials.
Brokers say the new tariffs won't necessarily be a boon to European producers because Argentinean and Asian biodiesel is $50-$100 a ton cheaper than fuel produced in the EU. These importers are likely to take over the U.S. segment of the market.
Write to John W. Miller at

Tony Blair urges Barack Obama not to let economic crisis overshadow environment

Tony Blair has urged Barack Obama not to allow the economic crisis overshadow efforts to tackle climate change.

By Tom Leonard in New York Last Updated: 7:50AM GMT 04 Mar 2009

Warning of the danger of putting environmental concerns "to one side", the former Prime Minister argued that the current economic problems "provide us not with an excuse for inaction but a reason for acting" on global warming.
Writing on The Daily Beast website just as his former Labour party rival met the US president in Washington, Mr Blair said that 2009 should be the year when the world - including America - agreed a new treaty on climate change.
"Some say that due to the economic crisis, action on the environment should be postponed. But either the climate is changing or it isn't," he said.
"If it is - and the scientific consensus on this is now vast - we cannot ignore it. To do so would be to multiply the risks to our future economy as well as the environment."
Welcoming the president's support for cleaner energy in his stimulus plan, Mr Blair said economic growth could be stimulated by investing in alternative energy and energy efficiency.
The world would be ready to cope when oil prices rose once more, he added.

Obama must pass climate laws ahead of Copenhagen, Danish minister warns

The US needs to set an example to developing countries if significant progress is to be made at the Copenhagen summit, Denmark's climate minister warns

Suzanne Goldenberg, US environment correspondent, Wednesday 4 March 2009 11.50 GMT

Connie Hedegaard Minister for Climate and Energy of Denmark during the opening of World Future Energy Summit 2009 (WFES) in Abu Dhabi, United Arab Emirates on 19 January 2009.
American leadership on climate change will be undermined if the Obama administration does not swiftly pass laws to reduce carbon pollution, according to Denmark's minister for climate and energy.
Connie Hedegaard said Obama must move from promises to action and push through global warming legislation ahead of the climate change summit in Copenhagen this December. Without that she said it would be hard for the US to exercise a credible leadership role at the summit.
"We can postpone anything but we have been postponing things for many years. We must come from this era where we talk about what to do and instead come to the era where we actually do things. We must come to that now," Hedegaard told the Guardian.
"The deadline set — 2009 — is actually set also by the former Bush administration. It is not just Denmark or Europe or somebody who set that deadline. It is set also by the United States. We must deliver on that deadline and I can see no better alternative than having cap and trade."
Hedegaard was the most forceful among a group of visiting foreign dignitaries in Washington this week who have been trying to build momentum ahead of the Copenhagen talks.
Also in Washington were Ed Miliband, the secretary of state for energy and climate change, Jim Prentice, Canada's environment minister, Yvo de Boer, the UN's environment minister and Tony Blair. The EU environment commissioner, Stavros Dimas, is due to visit Washington next week.
Blair said it was important for America to show the developing world it was serious about enacting measures at home on climate change — but stopped short of saying it needed to introduce a carbon cap and trade regime.
"People have to know that America is committed. Whether it is necessary to have that done legislatively — I don't know," he said.
Hedegaard, in remarks to Congress on Tuesday, returned to her theme that much preparation remained for the Copenhagen talks to make progress.
"We all have a load of homework before Copenhagen but the world is looking towards the United States to provide leadership," she said.
She said: "We know what we are going to do. We will have to set targets. We will have to come up with financial means. We will have to find ways and means to disseminate technologies faster and to help the least developed countries adapt to the climate change they are already experiencing. Those are the major issues on the table."
The visiting officials broadly see Obama as a positive force for climate change negotiations — a sea change from George Bush who had refused to ratify the Kyoto agreement, which the Copenhagen meeting will seek to replace.
Obama, who campaigned on a promise to green America's economy, added to those expectations by investing $100bn in environmental measures in his economic recovery plan earlier this month.
But Hedegaard said that move had to be followed up by climate change legislation. That could be difficult for Obama. An attempt last year to put a cap on carbon struggled to get even Democratic support before it was defeated.
Todd Stern, the state department's lead climate negotiator, agreed that the prospects for a successful outcome at Copenhagen would be improved if the US could pass climate legislation in advance.
"The optimum would be legislation that is signed, sealed and delivered," he said. "I think nothing would give a more powerful signal to other countries in the world than to see a significant, major, mandatory American plan."
However, he admitted that may not happen — although Democrats in Congress say they will take up legislation by the summer.
Some Democrats are pushing for Congress to take up other energy issues, such as mandating greater use of wind and solar power, before dealing with carbon caps.
But Hedegaard said that such actions would not be considered effective substitutes.
"Could we just put some taxes and things? Well then you will not be sure that we actually reduce the level of emissions and that is important if we are going to stick to what science tells us."
The US was also facing pressure to set interim targets — as a stepping stone towards reducing emissions by 80% in 2050.
But Stern told Congress, that America would not meet the short-term target of reducing greenhouse gas emissions by 25 to 40% by 2020.
"I don't think it's necessary, and I do know it's not possible," he said.
The European Union committed to reducing greenhouse gas emissions by 20% by 2020 late last year. But it said it would increase the cut if other industrialised states get on board. Obama has committed to reducing emissions by 20% on 2005 levels by 2020.
Hedegaard and others believe that interim targets are essential.
"It's always easy for politicians to set targets that are 41 years away," she said. "We also need ambitious action by the United States in the short- to medium-term."

Industry leaders denying climate change, says UK science minister

Lord Drayson says there is an urgent need to restate the scientific evidence for global warming and calls for companies to focus on their environmental obligations

Ian Sample, science correspondent, Wednesday 4 March 2009 17.40 GMT

Senior figures in the manufacturing industry do not accept that human activities are driving global warming or that action needs to be taken to prepare for its effects, the UK government's science minister saidtoday .
Lord Drayson said recent discussions with leaders in the car industry and other businesses had left him "shocked" at the number of climate change deniers among senior industrialists. Of those who acknowledged that global temperatures were rising, many blamed it on variations in the sun's activity.
Speaking in London to mark the launch of a new centre that will gather information from satellites to improve understanding of how the Earth's environment is changing, Lord Drayson said there was an urgent need to restate the scientific evidence for global warming and called for companies to focus on their environmental obligations despite the pressures of the economic downturn.
"There is a significant minority of senior managers who do not accept the evidence for climate change and don't see the need to take action," Drayson said. "It really shocked me that those views are held, and it's not limited to the car industry."
"The industrialists are faced with a very difficult challenge, which is huge infrastructure investment in existing ways of doing business and very difficult global economic circumstances.
"The temptation is to say we'll get round to dealing with climate change once we've fixed all this other stuff. We need to present them with the evidence to say this can't wait, we need to fix both," he added.
The new centre will receive £33m over the next five years and will coordinate research using Earth-observing satellite data at 26 British universities and institutions. Known as the National Centre for Earth Observation, it will focus on ways to improve climate change models, sea level rise estimates, flooding forecasts and ways to predict earthquakes and volcanic eruptions. It also hopes to develop improved weather forecasting software ahead of the London Olympics in 2012.
A major task for the centre will be to use real-time measurements of sea ice melting, droughts and atmospheric conditions to hone computer models that climate scientists use to predict future warming and its effects.
"Earth-orbiting satellites are revolutionising our understanding of planet Earth, in terms of how it works and what forces work against it, not least from climate change. But in order to get more from that data, to get climate information on 10 year scales, and on regional scales, we've got to iron out some significant issues we have with the computer models," said Alan O'Neill, director of the centre.
Some environmental processes are so poorly understood that they hinder the ability of climate models to make accurate predictions. The amount of carbon released into the atmosphere from deforestation in the tropics is so uncertain that estimates range from 0.7 to 2.6bn tonnes a year. Other scientists say that some feedback processes in the atmosphere are so unclear they do not even know if they will speed up global warming or slow it down.
The centre was due to take data from Nasa's ill-fated Orbiting Carbon Observatory satellite, which crashed into the ocean near Antarctica shortly after take-off last month. The satellite was designed to bolster understanding of climate change by mapping levels of CO² in the atmosphere.
Three new Earth observing satellites are scheduled to launch this year, including the European Space Agency's Goce probe, which by mapping the Earth's gravity field will reveal details of changes in ocean currents. Another satellite, Smos, will measure soil moisture and ocean salinity, with the third, cryosat-2, monitoring the thickness of continental ice sheets and sea ice cover.

US urged to lead in cutting greenhouse emissions

Wednesday, 4 March 2009

For the United States to play a leadership role crafting a global warming treaty, negotiators say Congress and the Obama administration must enact limits this year to reduce emissions of greenhouse gases.
Among those pressing for a new U.S. law is Todd Stern, the Obama administration's envoy for climate talks that begin in December in Copenhagen, Denmark.
"The optimum would be legislation that is signed, sealed and delivered," Stern said Tuesday.
"It's been a long time now that countries have been looking for the United States to lead and take action," he said. "I think nothing would give a more powerful signal to other countries in the world than to see a significant, major, mandatory American plan."
International leaders attending a symposium in Washington on climate policy echoed Stern's comments. They urged the U.S. to act despite a faltering economy.
"We are also being provided with an opportunity now to rethink business as usual," said Connie Hedegaard, the Danish minister for climate and energy. "Tackling global challenges, like that of the economy, we cannot do that without the United States. So we need the U.S. to engage."
The UK's energy and climate change minister Ed Miliband said what Congress does to control domestic emissions will send a clear signal for the Copenhagen talks.
"The level of U.S. ambition that we see on this issue is very important because it will define and have an impact on the response that we see from other countries," Miliband said.
The Bush administration pulled out of the last global climate change treaty, the 1997 Kyoto Protocol, citing a lack of participation by developing countries and potential harm to the U.S. economy. In the 1990s, during the Clinton administration, the Senate balked at ratifying the agreement.
Meanwhile, emissions of greenhouse gases in the U.S. continue to rise. A draft of the latest greenhouse gas inventory released by the Environmental Protection Agency on Wednesday reports that emissions of heat-trapping gases grew 1.4 percent from 2006 to 2007. The bulk of that increase was carbon dioxide from the burning of fossil fuels to meet a greater demand for electricity.
Since 1990, U.S. emissions have risen 17.1 percent, the agency reported.
Stern acknowledged that a climate bill by year's end was a tall order, and said that if a bill didn't get done in time he'd like it as far along as possible.
House Democratic leaders are planning to take up legislation setting up a mandatory cap and trade system for greenhouse emissions sometime this summer. Senate Majority Leader Harry Reid has said he would like the Senate to vote on a bill after the August recess.
Under cap-and-trade, the government would establish a market for carbon dioxide by selling credits to companies that emit greenhouse gases. The companies can then invest in technologies to reduce emissions to reach a certain target or buy credits from other companies that already have met their emission reduction goals.
President Barack Obama has called for an 83 percent reduction in greenhouse gases from 2005 levels by the year 2050 using cap-and-trade. His recently released budget banks on raising $646 billion in revenues from 2012 to 2019 from auctioning emission credits to companies. The money would fund renewable energy projects and provide a tax credit to help families cope with higher energy prices.
But there is widespread dispute over the details of how cap and trade would work, with critics saying it would lead to higher costs for American consumers and could hurt an already bruised economy.
Duke Energy Corp. chief executive Jim Rogers, a supporter of cap and trade legislation, previewed the debate to come. He said the Obama administration should redirect all money from the sale of credits to solving the "ecological crisis of our time."
Rogers said that as written now, Obama's budget would transfer wealth from the Southeastern and Midwestern states that depend more on coal for energy to coastal states where other fuels are used to produce electricity.

Turner adds voice to calls for a 'floor price' on carbon permits

Chairman of the UK's Committee on Climate Change adds an influential voice to calls for a minimum price for carbon pollution permits

Juliette Jowit, Wednesday 4 March 2009 17.15 GMT

A minimum price for carbon pollution permits should be considered to stop current low trading prices scaring off investment in cutting emissions, the government's top climate change adviser urged today .
The steep drop in the price of carbon under the European Emissions Trading Scheme (ETS) - from about €30 (£26.75) a tonne last summer to €8 (£7.13) last month - has recently prompted calls for a "floor" price.
Today, Lord Turner, the chairman of the Committee on Climate Change, added an influential voice to calls for the move to be considered, though the committee said more evidence was needed to be sure if current low prices would continue. The recent prices compare poorly to an projected price of £40 per tonne of carbon dioxide in a report by Turner's committee last year, which led to the UK committing to cut greenhouse gas emissions by 80% by 2050.
"We have concerns [that] if the carbon price continued at its present level it would not send the signals which are required [to investors]," Turner told MPs on the energy and climate change select committee. "I'd think, given the fall in the carbon price this year, that's something that should be considered. It would, of course, need to be considered at European level."
In January the European commission appeared to rule out intervening to prop up the falling price of carbon, and Ed Miliband, the UK climate change secretary, told the Financial Times he was "not convinced that a floor is particularly necessary".
Carbon trading is a key mechanism by which countries will seek to reduce emissions in a global climate deal to be negotiated in Copenhagen in December.
Concerns about a price floor in the ETS include the threat to EU businesses competing against rivals outside the trading scheme, and that it would make it more difficult to link the European system to other markets around the world, something high on the agenda for the Copenhagen talks.
A planned-for reduction in the allocation of carbon credits under the next phase of the European scheme, reducing by 1.7% each year from 2013 to 2020, would push up the price of carbon and so mean a floor was "not needed", said Endre Tvinnereim, a senior analyst for Point Carbon, independent experts in energy and carbon markets.
However Richard Gledhill, head of carbon market services for PriceWaterhouseCoopers, said there was growing interest in the issue: "Given where carbon prices are, and the scale of the challenge, I think we should look at this very seriously."
Today, the ETS price recovered to nearly €12 during morning trading.

Nissan to unveil new plug-in car

A plug-in car capable of going 100 miles on a single charge is to be unveiled by Nissan later this year.

By David Millward, Transport Editor, in Geneva Last Updated: 9:13AM GMT 04 Mar 2009

Ampera: Unlike the Vauxhall Ampera, which was announced at the Geneva motor show, the Nissan will not have an additional petrol engine

With a top speed of around 70 mph, the Japanese manufacturer claims that the new - and as yet unnamed - car will go faster than any other purely electric vehicle.
However the car will be made in Japan and America, rather than in Sunderland. It will, however be sold in Europe from 2011.
It is the latest in a series of electric cars being announced by manufacturers.
Unlike the Vauxhall Ampera, which was announced at the Geneva motor show, the Nissan will not have an additional petrol engine.
But in a separate development, Nissan announced that a new model, currently known as Qazana, will be made in the North East.
Production will start in the middle of next year.
It will safeguard 1,100 jobs at the Sunderland plant - where 1,200 people were made redundant in January - along with 2,000 at component manufacturers.
The new car will replace production of the Micra, which is being moved to India.
Trevor Mann, Nissan's senior vice president for manufacturing, said that this year was likely to be another tough one for carmakers.
"It will be difficult, but we are about the right size," he said.

Plug in version of Mini to go on sale in Britain

A plug in version of the Mini could be seen on the streets of some of Britain's cities by the end of the year.

By David Millward, Transport Editor Last Updated: 5:40PM GMT 04 Mar 2009

Despite Britain being the home of the Mini, the first tests of the plug in car are being carried out in Germany and the United States
Mini's parent company, BMW, is in talks with the Government over a scheme, which would see the UK participating in an international trial programme.
It is also speaking to local authorities and at least one development agency over establishing a network of charging points.
But despite Britain being the home of the Mini, the first tests of the plug in car are being carried out in Germany and the United States.
They have been allocated 600 cars between them, all of which have been made in Oxford - although the battery itself has been manufactured in Germany.
Should the trials be successful an electric Mini could be put on sale by the middle of the next decade, said Thomas Becker, BMW's head of Government relations.
However unless the car is mass-produced it could carry a price tag of over £30,000.
The US trials, which are taking place in New York and Los Angeles, are due to start within the next few weeks. The German studies will be held in Berlin and Munich in the spring.
"At the end of last year, the UK Government launched a competition for electric car demonstration projects," Mr Becker said. "These talks are still ongoing."
The plug-in Mini - or Mini E - has a top speed of 94 mph and can go 155 miles on a single charge as well as going from 0 to 62 mph in 8.5 seconds.
It is part of a larger BMW programme, known as Project I, to develop fuel-efficient urban cars with minimal carbon emissions.
At the same time BMW is drawing up plans for two hybrid cars of its own, which would see versions of its larger models being equipped with both petrol and electric engines.

Fiat touts cleaner engine Chrysler could use

The Associated Press
Published: March 4, 2009

GENEVA: Italy's Fiat Group SpA unveiled a new engine at the Geneva Auto Show on Wednesday that shows the kind of groundbreaking technology driving a proposed alliance with U.S. Chrysler LLC.
The Multiair is a two-cylinder engine that Fiat claims is revolutionary in design, making it possible to reduce both fuel consumption and carbon emission up to 10 percent by controlling air flow during the combustion cycle, while downsizing from four to two cylinders saves weight as well.
"In short, Multiair controls air to save fuel," said Alfredo Altavilla, chief executive of the Fiat subsidiary FPT Powertrain Technologies that developed the motor. "It is one of the key assets of the Fiat Group product and alliances strategy."
Multiair will debut in Alfa Romeo's MiTo beginning in the fourth quarter, before its rolled out across the company's brands.
More importantly to the troubled auto industry, looking for ways to improve environmental performance, the technology will be available to any of Fiat's partners — which can include Chrysler as soon as an alliance announced last month is finalized.

As part of the process of securing a deal, Fiat CEO Sergio Marchionne has jetted from Geneva to Washington D.C. to testify to lawmakers. The partnership would give Fiat a 35-percent stake in the U.S. automaker in return for new technology but no cash.
U.S. lawmakers have expressed concerns about the implications of a significant foreign stake in a major U.S. automaker. But the deal would give both automakers access to the other's markets and technologies.
Industry observers say the deal could be critical to the future success, if not survival, of both carmakers as the industry faces its most severe crisis ever, with volumes in Europe down by one-third and in the United States by as much as half.
Jim Press, Chrysler's president and vice chairman, said Fiat's strengths complement Chrysler's weaknesses — but that no decisions have been made yet on which specific automobile models and technologies Chrysler would exploit until the deal gets clearance.
"With Fiat there is a really good hand-in-glove match," Press said.
Fiat can offer Chrysler an array of high fuel-efficient small and mid-size cars and trucks, as well as technology to lower carbon dioxide emissions — areas where Press conceded Chrysler is "not as strong as we need to be in the future." Also, it would give Chrysler a foothold in Europe and other world markets where Fiat is present.
"It really brings the best of both worlds for both of us. Together we get economies of scale in purchasing. We get economies of development. And the distribution is an ideal fit because there is no conflict in our existing distribution system in North America," Press said.
Fiat's Marchionne had been shopping for a U.S. partner to launch both Fiat's hugely successful update of the successful 500 subcompact and its sporty Alfa Romeo brand when the economic slowdown took the wind out of auto production. Initially, he had hoped to bring the 500 to the United States by the end of last year.
Marchionne has made strategic partnerships a key part of his turnaround of the once-failing automaker, clinching alliances from China to Serbia to share platforms and technologies and launch Fiat in new markets. A stronger line of reliable, fun-to-drive cars has helped rehabilitate Fiat's image.
"It is very clear to me that Chrysler needs Fiat more than Fiat needs Chrysler," said freelance auto industry analyst Rebecca Lindland. "I think that Chrysler will benefit from Fiat's smaller cars and its powertrain expertise. Fiat is the world leader in smaller, efficient engines, both petrol and diesel."
Fiat has championed diesel technology with its Multijet engines, and the Multiair will come out with a diesel version in 2011, Altavilla said. He expressed interest in Chrysler's four-wheel drive technology.
What happens if the deal collapses?
Press said Chrysler, which is trying to secure another $5 billion in loans from the U.S. government by March 31, could look for another partner.
Lindland wasn't so sure.
"I think Fiat is probably in a strong enough position that I am sure it has other options for other alliances," she said. "For Chrysler, if the Fiat deal doesn't happen, they don't have a lot more options to secure."

French firm touts air-powered car at Geneva show

The Associated Press
Published: March 4, 2009

GENEVA: Consumers have grown used to the idea of cars powered with alternative fuels, from hydrogen to electricity. But running a car on air?
French firm MDI says it can be done, and used the Geneva Auto Show to display a bubble-shaped 3-wheeler it plans to start rolling out later this year.
The AirPod can travel up to 137 miles (220 kilometers) on a single 46-gallon (175-liter) tank of compressed air, producing zero emissions on the road, MDI spokesman Sebastien Braud said Wednesday.
Drivers can recharge their air supply in eight hours by plugging the car into electricity outlets, or by going to special 'air stations' where the process takes only 2 minutes.
The AirPod will be trialed by airlines Air France and KLM at their bases in Paris and Amsterdam, starting in May, said Braud. Another trial will begin in the southern French city of Nice in December.

The car will take some getting used to, and not just because of its novel power supply. Steering is done with a joystick, and the only doors open to the front and back. The two passenger seats are rear-facing and can be replaced with a cargo space.
Braud said the AirPod solves the problem of most electric-powered cars — heavy and costly batteries. This allows the car to be sold at a comparatively modest €6,000 ($7,500).
MDI is already planning a second model. The 4-wheeler OneFlowAIR cabrio will also run on compressed air, but can burn conventional fuels to extend its range.
Braud dismissed the suggestion that consumers might find his air-powered models a little lightweight.
Pointing at the green offerings of several well-known brands at the Geneva Auto Show, he questioned why anyone who wants an eco-friendly drive would buy a heavy sports car.
"That three-ton, 300 horsepower electric over there? That's bioterrorism," Braud said.
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Halve emissions from cars by 2050, auto industry told

Consortium claims '50 by 50' initiative could save equivalent of half EU's current C0² emissions

David Gow in Geneva, Wednesday 4 March 2009 16.46 GMT

The global auto industry and governments were today set a target of halving emissions from cars by 2050 by an international agency consortium including the UN.
The number of cars on the world's roads is forecast to have tripled by then, as billions in developing countries take to the roads. The aim of the "50 by 50" initiative, launched at the annual motor show in Geneva, is to offset that growth with improved fuel efficiency to stabilise greenhouse gas emissions at their current levels.
"We're not saying that nobody can have a car," said Jack Short, secretary general of the International Transport Forum, one of the forum members.
"We have not set a ceiling here, but a floor," added Achim Steiner, executive director of the UN Environment Programme.
Nobuo Tanaka, executive director of the International Energy Agency, said the target could be achieved with existing technologies, including electric vehicles, hybrids and hydrogen fuel cell-powered cars, as well as with more fuel-efficient internal combustion engines.
The consortium is already in talks with governments and auto industry executives about its initiative which, it says, should be started at once — and be integrated into financial support for the ailing industry.
"This is a building-block towards making the transport sector part of the solution towards a low-carbon economy," Short said. "The era of cheap oil is simply over and government policy to accommodate this change must include setting fuel standards," added Tanaka, saying transport accounted for a quarter of global emissions.
The consortium, which also includes the FIA Foundation, claims the programme could save 6bn barrels of oil and 2 gigatonnes of CO² a year, equivalent to half the total current emissions of the EU.
Based on emission levels in new cars built in 2005, the scheme sets interim targets to be achieved by 2020 and 2030 in line with those set by the Intergovernmental Panel on Climate Change (IPCC). It comes with the claim that it could cut global oil import bills by $300bn-plus a year by 2025 and by $600bn by 2050.
The protagonists insisted that it should begin now because of the crisis in the car industry, not despite it. "More than ever, clear signals are needed regarding where vehicle designs and markets should be heading over the coming decades," they said.
But Tanaka cautioned that electric cars fuelled by power from old-style coal-fired plants made no sense or contribution to cutting emissions. "We have first to de-carbonise the power sector and then use new technologies that make a genuine difference." Steiner added: "We need a de-coupling of the growth of traffic from emissions."
The initiative came just hours after Fiat launched a new internal combustion engine, both petrol and diesel, that, it claimed, could cut emissions by at least 10percent and produce 10percent more power. The "Multiair" engine, to be used initially in Alfa Romeo's Mito supermini car, directly controls air through the intake engine valves.
Alfredo Altavilla, head of Fiat Powertrain Technologies, said the turbo version in small cars could be 25% more fuel-efficient and reduce emissions by the same proportion — making the Mito one of the first models to emit less than 80g per km.
He took a swipe at rival manufacturers such as Toyota, which have staked huge investments in hybrids, electric vehicles and alternative fuels. "When we have reached, say, 2020 or 2025 and the evolution of the internal combustion engine is exhausted then you could move to electric cars if needed.
It makes no sense to put on the market engines which cost ¤5000-7000 more than conventional engines and hoping someone will subsidise these exotic technologies. What we're doing is reducing consumption and emissions but remaining affordable." But he refused to set a price for the new engine or the car.

US EPA to hear state vehicle emissions case

By Bernard Simon in Toronto
Published: March 4 2009 18:10

The US motor industry’s financial woes will collide with the administration’s drive against global warming at a hearing on Thursday in Washington on whether states are allowed to set tighter vehicle emission standards.
The US Environmental Protection Agency will reconsider an application by California and 13 other states to set their own vehicle emission standards. It could overturn a March 2008 decision that prevented them setting stricter standards than the federal government.

In a reversal of the former Bush administration’s policy, President Barack Obama directed the EPA shortly after taking office to move swiftly on the states’ application. He has also asked the Transportation Department to implement tighter fuel-economy standards for cars and light trucks.
”Our goal is not to further burden the struggling American auto industry,'' said Mr Obama. “We must help them thrive by building the (fuel-efficient) cars of tomorrow”.
The motor industry has launched a vigorous campaign against the states’ application, contending that it will lead to a costly patchwork of state regulations.
The Detroit carmakers – General Motors, Ford Motor and Chrysler – are especially concerned that tighter emission regulations will dampen demand for sport-utility vehicles and pick-up trucks, which are their most profitable vehicles.
Under legislation passed in 2007, carmakers are already committed to lifting their vehicles’ fuel economy to an average of 35 miles a gallon by 2020, a 40 per cent improvement on previous standards.
Eric Fedewa, a powertrain specialist at CSM Worldwide, a Michigan consultancy, will tell Thursday’s hearing that “these improvements will be staggeringly expensive to the manufacturers. Many of those costs will be passed on to consumers.”
Mr Fedewa adds that “California’s regulatory agenda could start a domino effect of business failures reaching into every corner of the auto industry and the national economy”.
Instead, he proposes a variable fuel tax setting a floor price for petrol of $3 a gallon. The average price is currently $1.93, down from last July’s record of $4.11. But US politicians have so far adamantly resisted calls for higher gasoline taxes.
Environmentalists dismiss the industry’s objections to the waiver application. John DeCicco, senior fellow at the Environmental Defence Fund, said that carmakers have exaggerated the costs of complying with the proposed California standards.
He noted that BMW, the German carmaker, has operated profitably in the US while cutting its vehicles’ carbon footprint. Sales of BMW’s small Mini surged by 29 per cent last year, among the biggest gains for any model.
Mr DeCicco describes the proposed split between federal and state standards as a “two-tier” system rather than a patchwork, because the other 13 states would implement the same standards as California.
As an alternative to higher fuel taxes, the Obama administration has begun working with Congress on cap-and-trade legislation governing greenhouse gas emissions. The administration takes the view that such a system would also be more effective than the current regulatory approach under the Clean Air Act.
The EPA is not expected to rule on the states’ waiver application for several months.
Copyright The Financial Times Limited 2009

U.S. Weighs Car-Emissions Policy

Obama Juggles Desires of California, Auto Makers in Exploring National Rule

The Obama administration is working to develop a single national standard to curb greenhouse-gas emissions from automobiles, a sign of the complexity it faces reconciling its environmental policy with its efforts to bail out Detroit auto makers.
A White House spokesman said President Barack Obama "believes that one national policy for autos would provide the industry with certainty while achieving our environmental and energy independence goals, and it is a topic the administration is exploring as part of the broader restructuring discussions with the auto makers."

Barack Obama
Administration officials are working on interrelated policies that affect the struggling auto industry. The Department of Transportation is working on new, more rigorous vehicle fuel economy standards for the 2011 model year. The Environmental Protection Agency is considering broad restrictions on global warming emissions. At the same time, the administration is considering whether to grant California a waiver from the Clean Air Act so the state can enforce its own tailpipe emissions standards, potentially stricter than federal rules.
At Mr. Obama's direction, the EPA will hold a hearing Thursday on California's waiver request.
The end result could be that auto makers have to boost the average mileage of their new vehicle fleets beyond 35 miles per gallon by 2020, the current federal requirement. The previous fuel-economy standards called for manufacturers passenger car fleets to average 27.5 miles per gallon and truck fleets to average 23.1 miles per gallon in the 2009 model year.
California's regulations call on the industry to achieve the equivalent of 35 miles per gallon by 2017 and over 40 miles per gallon in 2020, by some estimates. At those levels, the vehicles sold in the U.S. would look much more like those on offer in Europe -- lighter, smaller, and equipped with more sophisticated engine and transmission technology to reduce fuel consumption and thus, greenhouse gas emissions.
General Motors Corp. and Chrysler LLC, the two auto makers surviving on government loans, have struggled for two decades to make money on small cars in the U.S. Auto makers have been pressing the White House to adopt a single emissions standard for vehicles that would apply in all 50 states, arguing it would be a significant new cost burden to comply with different rules in various parts of the country.
It's not clear how the administration will establish a standard that reconciles the interests of California regulators and auto makers, which have been battling over the issue for years. The White House may also have to resolve differences between the Department of Transportation and the Environmental Protection Agency, which have a history of conflict over how to the regulate the auto industry.
On Wednesday, California's top air-quality regulator, Mary Nichols, said she is confident Mr. Obama's administration will allow the state to enforce its law, which calls for a 30% reduction in greenhouse-gas emissions from new cars by 2016. So far, 13 states and the District of Columbia have formally adopted the California standards, and several others are considering following suit.
The Alliance of Automobile Manufacturers, a trade group representing GM, Chrysler and other major manufacturers, expressed support for the White House position. "Now more than ever, we believe that a single, comprehensive, national program that bridges California's interests with those of other states and the federal government is the most effective way to move us all toward our goals of reduced greenhouse gas emissions."
Write to Stephen Power at and Christopher Conkey at