WHAT ARE THE TARGETS?

From Jan. 1, 2025 the average level of carbon dioxide emissions per kilometre for each new car sold should not exceed 93.6 grammes.

That is 19% lower than this year’s target, says consultancy Dataforce, which says 2024 targets would be equivalent to 116 g/km under the new system of measuring emissions.

Each manufacturer will be allocated specific targets based on the EU rules that take into account the average mass of its new vehicles.

Luxury carmakers, or “small volume” manufacturers, have separate targets.

WHAT ARE THE EXPECTED FINES?

Manufacturers will be fined 95 euros for each g/km in excess of their specific target on each new vehicle registered.

Luca De Meo, Renault chief executive and chief of the European Automobile Manufacturers’ Association , has said the industry overall could be liable for around 15 billion euros in fines next year.

Stellantis Europe chief Jean-Philippe Imparato told Italian newspaper Milan Finanza last month that it faces fines of as much as 3 billion euros if it can’t comply.

But Barclays analysts consider Stellantis, BMW and Renault to be better positioned than Ford, Mercedes and Volkswagen, which have large CO2 gaps to close.

Potential fines for non-compliance for Volkswagen alone could be 1.5 billion to 4.7 billion euros in 2025, depending on CO2 savings, according to brokerage Stifel.

WHAT CAN CARMAKERS DO TO ESCE POTENTIAL FINES?

Companies with lower EV sales can “pool” their emissions with sector leaders, purchasing emissions credits from other manufacturers to lower their overall averages.

Japan’s Suzuki has signed a pooling agreement with Geely-owned Volvo, a spokeswoman has said. Ford said earlier this year it had purchased $3.8 billon of credits for use in North America and Europe.

Many are also expected to offer discounts on their EVs to boost sales. They could also increase the prices of their petrol engine cars to make EVs look comparatively more appealing and reduce sales of CO2 “bad actors” in their portfolio.

WHO STANDS TO BENEFIT?

Volvo is one of the furthest ahead in lowering overall emissions, with a large share of its output made up of electric vehicles and plug-in hybrids.

Tesla, and Chinese companies like BYD, are also likely to be in a position to sell emissions credits to poor performers. Credits could cost around 20 euros per excess gramme of CO2, Barclays estimated in September, based on likely supply and demand.

MIGHT THE TARGETS BE DELAYED OR CHANGED?

German Economy Minister Robert Habeck has called for a more flexible approach to the targets, such as allowing carmakers to offset possible fines in 2025 if they exceed their quotas for 2026 and 2027. In late September, he suggested pulling forward the revision of emissions targets from 2026 to 2025.

ACEA chairman Luca de Meo told reporters in November he hoped fines could be calculated across the five-year period to 2030, when emissions rules are due to be further tightened.

Austria, Bulgaria, the Czech Republic, Italy, Romania and Slovakia are asking the Commission to bring forward to next year a review due in 2026 on the EU’s auto transition regulation.

The states also want the Commission to reduce fines for non-compliant companies.

This article was generated from an automated news agency feed without modifications to text.