As giant auto makers beg governments to bail them out of the economic crisis that has brought them to their knees, some authorities have named a price -- make greener cars to drive. The EU has committed to cutting greenhouse gas emissions by a fifth by 2020 as part of efforts to curb the warming of the Earth's climate which scientists warn could have a devastating impact, hitting poor countries hardest.
As giant auto makers beg governments to bail them out of the economic crisis that has brought them to their knees, some authorities have named a price -- make greener cars to drive.
The EU has committed to cutting greenhouse gas emissions by a fifth by 2020 as part of efforts to curb the warming of the Earth's climate which scientists warn could have a devastating impact, hitting poor countries hardest.
After European governments stepped in to help rescue several major banks, the auto sector has opened up a new front in the economic battle and EU officials -- still struggling to pin down a global treaty on climate change -- want any aid to the auto sector to be eco-friendly.
"Some are arguing that, given the very difficult economic situation, we can no longer afford our climate change and energy package," the president of the European Commission, Jose Manuel Barroso, said in Lisbon on Friday.
"They could not be more wrong ... The consequences of ignoring the risks of climate change will be even greater than the consequences of ignoring risks from the financial sector."
The European Commission is to present an economic stimulus programme on Wednesday, worth 130 billion euros according to the German government.
"Spending to beat the recession must be smart spending," Barroso said.
"We must invest in those areas which are critical to our future competitiveness," he added, including "clean technologies to support the transition to the low carbon economy (and) energy efficiency."
The industry has warned that going greener will have its own price.
The head of Ford Germany said the European Union should make around 40 billion euros (50 billion dollars) in loans available to the continent's ailing auto sector, in an interview with the Bild newspaper published Friday.
Bernhard Mattes said such assistance would not be state aid but was "in order to allow all European carmakers the possibility to meet EU requirements on fuel efficiency and emissions, etc., more quickly."
EU Industry Commissioner Guenter Verheugen called for the European Investment Bank (EIB) to increase credit lines "for makers of more eco-friendly cars."
On Monday, the EIB said it was ready to increase loans to Europe's ailing auto sector by up to 30 billion euros over two years. Part of the money is earmarked to encourage the development of greener cars, a bank spokesman said.
The drive for greener transport also came into play in the United States, where auto makers are in frantic efforts to pull themselves back from the brink.
The bosses of the "Big Three" -- General Motors, Chrysler and Ford -- asked Congress for an extra 25 billion dollars in aid, in addition to an existing loan of the same size, but Democrats on Wednesday told them to come back with a new industry restructuring plan.
The auto giants say they have been hit by falling demand amid the financial crisis but critics say the firms are paying the price for failing to develop smaller, fuel efficient cars, instead concentrating for years on gas-guzzling sports utility vehicles, demand for which was hit by high fuel prices.
Analysts at consultancy Global Insight however accused US politicians of not always being realistic in their bids to squeeze environmental concessions out of car makers in return for more bailout cash.
In an analysis published on Friday, they cited a call by US lawmakers for manufacturers to make vehicles with much tighter fuel economy standards, raising the average to 50 miles per gallon from 35.
"There is absolutely no business plan scenario that would make producing such vehicles a reasonable idea for domestic auto makers," the analysts wrote.
In Europe, some see opportunities in the auto makers' quest for aid.
After German car maker Opel was forced to ask the government for loan guarantees, the solar power group SolarWorld on Wednesday moved to cash in, springing a surprise bid to relaunch Opel as a maker of green cars.
Analysts reacted sceptically and its US parent company General Motors said Opel was not for sale.