Cleaning the Diesel Engine Emissions: The case of Danish automotive exhaust emission suppliers

This paper examines how technologies for cleaning of diesel emission from road vehicles can be supported by facilitating a technology push in the Danish automotive emission control industry. The European commission is at present preparing legislation for the euro 5 emission standard (to be enforced in 2010). The standard is expected to include an 80% reduction of the maximum particulate emissions from diesel cars. The fulfillment of this requirement entails development and production of particulate filters for diesel cars and trucks. Theoretically the paper suggests a rethinking of public industry policy based on Michael Porters cluster theory. The paper however suggest that the narrow focus on productivity and economic growth in Porters theory should be qualified and integrated with a broader scope of societal policy aims including social and environmental issues. This suggestion also necessitates a rethinking of public governance that involve multilevel governance and integrating technology push and pull strategies. The agenda requires a re-conceptualisation of the innovation concept with special emphasis on value chain dynamics. The paper includes an analysis of the Danish innovation and industry policy and an analysis of the Danish automotive emission control industry based on case studies of four emission control system manufacturers.The paper concludes that an innovative cluster strategy should be launched in order to enhance innovation to the benefit of economic development in the Danish manufacturing industry and to the benefit of the environment. The implementation of the strategy calls for a multilevel governance where the public authorities integrate initiatives at different levels of governance and thereby creates a technology push of exhaust emission technology. The innovation strategy suggested in the paper combines and integrate different initiatives on four levels of governance: enforcement of strict emission limits that includes limits for emissions of particulates  European level), funding for university research in strategic important areas of emission control technology, creating public-private innovation partnerships (national initiative), building regional innovation and competence centres for emission control technology, and creation of local environmental zones (in line with the Odense experiment and the Copenhagen City Logistics experiment) that will enable manufacturers to test new technology and develop prototypes (local level).