If it is up to the largest group in the European Parliament, the centre-right EPP, a line will be drawn through the ban on the sale of cars with combustion engines in 2035. That includes fines imposed on car manufacturers if they fail to meet their 2025 emissions reduction targets.
The European automotive sector is currently in dire straits. For instance, manufacturers are facing fierce competition from China, among others, while at the same time having to comply with strict requirements from the European Union (EU). The EU, for instance, is imposing limits on sales of combustion-engine cars by 2035. This is forcing car manufacturers to invest in electric vehicles (EVs), even though demand for them is lower than expected.
CO2 penalties
In addition, European legislation sets strict requirements for car manufacturers to reduce CO2 emissions. For instance, cars sold by carmakers in the European Union (EU) are only allowed to emit an average of 94 grams of CO2 per kilometre, compared to 118 grams now. Those who fail to meet this standard will be fined 95 euros for every gram of CO2 their emissions exceed the standard per car sold. This could lead to a significant fine amount, which could run into millions of euros for large car manufacturers.
Many car manufacturers risk failing to meet this standard in practice, partly due to lower demand for EVs. Manufacturers are selling more combustion engine cars than expected, which translates into higher average emissions per car sold.
EU member states sound alarm bells
Several car manufacturers and EU member states have long been sounding the alarm over these fines. Examples include the Czech Republic and Italy, which have been acting together on this issue for some time. In September, for instance, the Italian government already strongly criticised the fines, as well as the EU-wide ban on sales of fuel cars by 2035.
Czech Transport Minister Martin Kupka echoed this in November. He called the imposed limit of 94 grams of CO2 per kilometre of emissions "unrealistic". In doing so, Kupka pointed, among other things, to the drop in demand for EVs in the EU. Whereas when the limit was drawn up, a 20% increase in EV sales was still taken into account, in practice it has actually fallen.
Kupka also called the fines counterproductive. Manufacturers would be better off using the money spent on the fines to invest in cleaner vehicles, including EVs.
'€15bn fines looming for carmakers'
Similar noises are heard from European car manufacturers. For example, Luca de Meo, top executive of Renault and president of the European Automobile Manufacturers Association ACEA, stated in September that European carmakers collectively risk some €15 billion in fines. To avoid this, manufacturers would have to produce a total of some 2.5 million fewer cars. This is equivalent to about a quarter of the total European new car market next year.
So car manufacturers now appear to have support from the EPP, which is the largest group in the European Parliament. In doing so, Manfred Weber, who heads the EPP, recognises the need for the EU's sustainable ambitions and the reduction of CO2 emissions. However, Weber advocates achieving these ambitions with a mix of technologies, with room for internal combustion engines as well.
Exception for bio- and alternative fuels
Among other things, the EPP advocates an exception for cars running on biofuels and alternative fuels in the new regulations. The EPP also wants to bet on supporting plug-in hybrids.
Incidentally, this is not the first time the EPP has been critical of the plans. Earlier, the party advocated delaying the stricter CO2 limits until 2027 or relaxing the enforcement of the rules. However, Dutch Eurocommissioner for Climate Action Wopke Hoekstra, himself an EPP member, opposed this.
More information on the EPP's stand can be found here.
Author: Wouter Hoeffnagel
