Europe’s leading domestic appliance-makers are demanding fiscal incentives to persuade consumers to switch to more energy-efficient dish-washers and fridge-freezers and help the EU meet its ambitious targets for cutting carbon emissions.
Bosch, Beko, Electrolux, Indesit, Philips and other manufacturers in the CECED trade body agreed this week to scrap a 10-year-old voluntary agreement to improve the energy performance of appliances such as washing-machines because of poor returns on investment and a continuing squeeze on profit margins.
These appliances now carry mandatory labels telling consumers how energy efficient they are and, in the past decade, the average washing machine sold in Europe has cut water consumption by 62% and energy use by 44%, according to Marco Milani, chief executive of Indesit. Virtually all European appliances sold are in the top two classes (A and B) for energy-efficiency, he added, with 35% meeting even higher standards.
Magnus Yngen, head of Electrolux’s appliances business, said the combined impact of the industry’s €10bn (£6.78bn) investment had been to cut 17m tonnes of CO2 or the equivalent of the carbon output of nine 500MW power plants.
The EU’s spring summit earlier this month agreed a binding target of a 20% jump in energy-efficiency by 2020 and CECED is now calling for legislative measures to enforce improved performance standards in future. Its approach is the direct opposite of European car-makers who are lobbying to retain a voluntary deal to cut their CO2 emissions and to derail European commission proposals to impose a mandatory limit of 120 grams from each new car by 2012.
The appliance industry, which turns over €40bn a year, has seen its profit margins squeezed to just 1 or 2% despite a recent upturn in sales. It partly blames a wave of new rivals from low-cost countries and own-brand machines from the big European retailers but also alleges that several of the cheap imports carry false or misleading labels about their energy efficiency.
Mr Yngen said: “Governments must guarantee fair competition by enforcing the law and ensuring that product declarations are genuine – or our investment in high performing products is compromised. The next round of improvement needs to be driven by legislation that appplies to all and is enforced on all … Too many governments are not stopping careless or unscrupulous operators from marketing products that claim better energy efficiency than they actually deliver. Free-riding must be strongly discouraged.”
Luigi Meli, the CECED director general, said: “Today we are facing a situation where the post-Kyoto plans, the 2020 targets, still call for further investment and we can’t afford them if the pay-back from the previous wave of investment is not there.”
Mr Milani urged the 27 EU governments to consider a range of tax incentives, including credits for producers and consumers, to encourage the owners of 188m machines more than ten years old to buy new, more energy-efficient appliances. Similar tax-breaks operate in the US and Australia – and in Italy for new, greener cars.
Alain Grimm-Hecker, head of French group SEB, said the manufacturers were victims of their own success in improving quality: Europe’s consumers simply held onto their old appliances until they became defective. “We Europeans are brought up to never replace a product if it still works even though replacing it earlier would improve the environment and save money through lower energy bills.”
David Gow in Brussels.
Thursday March 22, 2007
Guardian Unlimited