Environmental protection regulations

The new Energieeinsparverordnung (EnEV 2009 – German Energy Conservation Regulation), which entered into force in Germany on October 1, 2009, aims to help reach national climate protection targets. On the basis of this Regulation, economically usable potential in buildings will be tapped, making the buildings more energy efficient. To this end, buildings’ energy requirements will be adjusted in keeping with economic viability, the state of the art and trends in energy prices. Stricter heat insulation requirements for the building envelope are expected to reduce annual consumption of primary energy sources in the future. In addition, building services engineering will be required to become more energy efficient.

This Regulation will affect building design and servicing facilities for Volkswagen’s industrial buildings.

The G20 member states have pledged to limit global warming to 2°C and aim to reduce global greenhouse gases by 50% in the period up to 2050.

The third trading period in the European Union Emissions Trading Scheme is scheduled to begin in 2013. Under this scheme, which is due to run until 2020, the allocation of CO2 emission certificates free of charge will be dramatically scaled back; at the same time, a large number of industries will be included that were previously not subject to emissions trading. This will place an additional burden on Volkswagen and other companies. To avoid a situation whereby production is moved to non-EU countries along with the associated CO2 emissions, exceptions exist for the main industries affected. According to the European Commission, the automotive sector fails to satisfy the main criterion of trading intensity with non-EU countries of at least 30%. Along with higher costs, Volkswagen will therefore see administrative and monitoring expenses increase sharply in the near future.

Higher prices for energy and emissions rights do not only apply to our own facilities but will also increase materials prices, especially in the case of steel and aluminum. Volkswagen is using an energy management system and energy conservation programs to counteract the possible financial repercussions and risks to its image. In addition, Volkswagen operates its own highly efficient power plants for generating power and heat, and is therefore able to secure part of its energy supplies itself.

In accordance with the product-related climate protection regulations, the scope of the EU Regulation capping CO2 emissions from passenger cars is currently being expanded to include light commercial vehicles. Flanking measures designed to influence consumer behavior and fiscal policy in EU member states by way of a CO2-oriented vehicle tax will create strict requirements within the EU with a planning horizon of up to around 2020. At the same time, the European regulatory framework is developing into a model for other international regulations, for example in India. Current draft regulation on CO2 emissions and fuel consumption in China, the United States and Korea is also influenced by developments in the EU, leading to increased global convergence of regulatory approaches and targets. In 2009, this trend was even reflected in the economic stimulus packages implemented around the world in the form of similar provisions for environmental or scrapping incentives. This is in line with the auto industry’s call for lower trade barriers as well as global harmonization of technical regulations and a political framework.

Given the growing product differentiation in the global markets, harmonization of the general framework is instrumental in creating a more level playing field, which will increase demand for innovative technologies that are available worldwide. Volkswagen has identified this trend and set itself the goal of becoming the international technology leader in the automotive industry and expanding its lead over time. The Volkswagen Group is well on the way to achieving this goal with cost-efficient technologies whose economies of scale are leveraged successfully throughout the entire Group.

Further developments, especially in climate protection regulation following the Kyoto Protocol, will affect the entire transport sector. Emissions trading, which previously did not extend to passenger cars and light commercial vehicles, will now be discussed in the context of its potential to reduce CO2 emissions in freight transport and along the whole logistics chain. At the same time, future emission reduction requirements will also include air and maritime transport, requiring a reassessment of the profitability of existing industrial and distribution structures.

The World Climate Conference in Copenhagen failed to live up to high expectations that the summit would produce a global framework for climate protection. Due to the lack of agreement on concrete reduction targets for the individual regions and countries, it is still impossible to say how strict climate protection requirements will be in the future. Requirements will still vary quite considerably from region to region. On a positive note, however, all member states agreed that global warming should be held at 2°C. This has created a solid basis for further negotiations and provides hope for a meaningful, economically viable reconciliation of interests.

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