EU fails to agree on CO2 emission limits
At a meeting in Brussels on Tuesday, the EU failed to overcome months of division on new CO2 emission limits. Meanwhile, ACEA pleads for decarbonisation at a pace that keeps individual mobility affordable for all.
The division is between the activist members of the European Parliament (EP) and a group of eight EU member states (including the Netherlands, France and Sweden), who want to push through sharp curbs on CO2 emissions from cars and vans; and Germany and other car-producing EU member states, who fear that those curbs will hurt their industries, and cost jobs.
In the middle: the European Commission (EC), whose initial proposal was that emissions should decline by 30% by 2030, compared to 2021 levels – a proposal reluctantly backed by Germany.
But in October, the European Parliament proposed to cut CO2 emissions by 35% by 2030 (and, as an intermediate goal, by 15% by 2025). The EP’s Environmental Committee even wanted to go further, to -40% by 2030.
In order to reach a compromise, representatives of the EP, EC and EU member states have held several rounds of talks, which ended in failure this week.
Transport & Environment, the Brussels-based lobby group for cleaner vehicles, blamed current EU presidency holder Austria for that failure: “(Austria put) its own interests and those of the German car industry and their operations in Eastern Europe ahead of those of the whole of Europe”. According to T&E, the proposal tabled by Austria, and all the exceptions it included, would have required a reduction of CO2 emissions by just 24% by 2030.
Strict CO2 emissions targets for the transport sector should help the EU reach its overall target of reducing greenhouse gas emissions by 40% by 2030. Transport is the only industry in which emissions are still rising.
These EU targets would apply to cars and vans only; member states are separately considering a target for truck emissions.
Discussions on the level of future CO2 emission reductions may sound academic but have two major real-world implications – despite the obvious environmental ones.
Firstly, higher curbs will force manufacturers to invest more heavily to reach the required targets. This could hurt their global competitiveness, and ultimately cost market share and manufacturing jobs.
Secondly, warns ACEA, higher curbs could drive up the cost of mobility for end consumers beyond affordable levels. At a board meeting of the European Association of Automotive Manufacturers, CEOs of Europe’s major OEMs reiterated their commitment to decarbonisation of mobility – but warned that this transition needs to happen at a pace that keeps individual mobility affordable for all.
The alternative is unrest of the type recently seen in France, where the so-called Yellow Vest movement was sparked by a proposed hike in fuel prices. In that contect, ACEA is worried by the fact that “the current CO2 proposal goes far beyond what is economically and socially justifiable”.
ACEA believes that the EP’s aggressive ambitions – not just the -40% target for CO2 emissions reduction, but also a quota for EV sales – endanger the affordability of mobility for millions of Europeans: pushing overly-ambitious CO2 reductions risks making cars too expensive for people of limited means.
€4 billion fines
Right on time to underline that point was a study by PA Consulting, concluding that OEMs could face up to €4 billion in EU fines for missing their CO2 targets in 2021. By that year, OEMs must conform to a CO2 emissions average of 95 g/km for their entire model range.
The OEMs that won’t make the norm by 2021. They face a fine of €95 per gram over the norm for each vehicle sold in Europe. According to PA Consulting, these eight manufacturers won’t make the norm on time:
- FCA: 91.8 g/km in 2021, which translates into a fine of €700 million (10% of FCA’s 2017 turnover).
- VW Group: 97.7 g/km, for a fine of €1.4 billion, the highest amount of any OEM – due to the Group’s number one position. This is also 10% of total Group turnover (2017).
- PSA: a fine of €600 million, or about 20% of group turnover (2017) – due in large part to the acquisition of Opel, the vehicles of which have CO2 emissions 30% higher than their PSA equivalents.
- Ford: 99.8 g/km, and a fine of €430 million, or 10% of its 2017 turnover.
- Hyundai-Kia: 96.1 g/km, and a fine of €300 million, or 5% of its 2017 turnover.
- BMW: a fine of €200 million.
- Daimler: a fine of €190 million.
- Mazda: a fine of €75 million.
Only five OEMs would attain the CO2 emission target for 2021: Toyota (lowest with 87.1 g/km), Volvo, Renault-Nissan-Mitsubishi, Honda and Jaguar-Land Rover.