EU pollution targets corner Porsche

Mr Wiedeking has joined other German luxury-car makers to protest against a mandatory European Union cap on carbon-dioxide emissions that he says favours companies such as Renault and Fiat that produce smaller vehicles.

"This is a business war in Europe," Mr Wiedeking told shareholders at Stuttgart's Porsche Arena last month.

"It's the French and Italians up against the Germans."

The European Commission is proposing binding limits because car makers risk missing voluntary targets. The commission plans to outline a preliminary proposal today in Brussels. Carlos Ghosn, of France's Renault, says it's time the industry did more to protect the environment. Renault, Peugeot Citroen and Italy's Fiat each have several models with limited emissions.

Cars account for more than a 10th of the EU's carbon dioxide emissions, the main gas blamed for global warming.

"Jobs are not lost when you proactively embrace change, but if you reactively resist it," said Johannes Laitenberger, the spokesman for commission president Jose Barroso. The goal is to limit climate change while preserving competitiveness, he said.

"The key to meeting both objectives is to be ahead of the game, not sticking our heads in the sand, not standing still," he told reporters in Brussels.

Porsche's least-emitting vehicles are versions of the Boxster and Cayman sports cars, which each produce 222 grams of carbon dioxide per kilometre. The European industry's non-binding goal is to reduce emissions to 140 grams in 2008. EU regulators have discussed a mandatory cap of 120 grams a kilometre in 2012.

It will cost car makers an average EUR2532 ($A4233) a vehicle to meet both targets, according to a report for the commission.

The cost to Porsche might average EUR4650 a car, said Ferdinand Dudenhoeffer, head of the centre for automotive research at the University of Gelsenkirchen, near Dusseldorf in Germany. He was once an executive at the company.

German Chancellor Angela Merkel has vowed to protect her country's car makers, saying that the Government of Europe's largest economy would block any attempt to introduce a blanket emissions reduction for all cars and will instead push for limits to be set by type of vehicle.

About 15 million cars are sold annually in the EU, where about 2 million people are employed making vehicles and their parts. That represents 7 per cent of all EU manufacturing jobs.

Porsche boasts the car industry's highest profit margin, with operating profit representing 29 per cent of sales in fiscal 2006. That compares with 4 per cent at Fiat and Renault's estimate of 2.5 per cent.

Key points

• Porsche says emissions caps favour French and Italian manufacturers.
• German Chancellor Angela Merkel vows to protect her country's car makers. 

Bloomberg