► European Commission softens blow of tighter CO2 targets
► Car manufacturers now have longer to meet targets
► Zero-emission alternatives to BEV will be allowed
The European Commission has responded to pressure for car manufacturers, announcing proposals to relax CO2 emissions targets that could have resulted in massive fines for non-compliance. A position of technology neutrality will be adopted in the continued push towards net zero, as well.
The changes are intended to make the European car industry and its supply chains more resilient – particularly in the face of increased competition from Chinese EV manufacturers such as BYD. The plans will be detailed in full in the Future of the Automotive Industry bill that will be published by the European Commission on Wednesday before being considered in the European Parliament for adoption by the EU.
It’s all about fleet average CO2 emissions
For many years, European car manufacturers have been legally bound by CO2 emissions targets based their fleet average – that’s the average CO2 emissions of all the cars a given manufacturer sells in a calendar year. Failure to meet those targets incurs a hefty fine, potentially billions of euros.
The fleet average targets have become a lot stricter for 2025, at 93.6g/km. Initially, manufacturers had to comply with that target in 2025, however the compliance period will be extended to 2027 under the new plans. Many manufacturers had been pressuring the EU to relax what are highly ambitious targets.
The regime of ever-lower emissions targets over the coming years remains in place, down to a fully zero-emissions fleet by 2035. European Commission president Ursula von der Leyen said the proposals provide “more breathing space for industry and more clarity, without changing the agreed targets.”
What else was announced?
Other measures to assist the EV transition are in the Commission’s bill. They include charging infrastructure targets, incentives for EV buyers and a commitment to allowing a range of zero-emissions technology, rather dictating the use of battery-electric vehicles. That opens the way to vehicles powered by alternatives such as hydrogen and synthetic fuels.
The bill also advocates building trading relationships that ensure robust supply chains of the critical minerals needed for zero-emission vehicles and moving away from dependency on other regions such as China.
The EU will also instigate an “industry alliance” where the European motor industry can pool its resources on autonomous vehicles. Von der Leyen said the Commission will develop the rules around testing autonomous vehicles and back large-scale pilot schemes.
Industry welcomes the changes
The changes were announced after a meeting with senior figures from the European motor industry who have voiced their support. A statement released by Stellantis said: “The flexibility introduced regarding CO2 targets, with an extended compliance period, is a meaningful first step in the right direction to preserve the competitiveness of our sector while remaining faithful to the targets and committed to electrification. It is now important that the proposed targeted amendment be turned into law quickly. This initiative, together with further support to targeted purchase and fiscal incentives, cheaper (green) energy and investment into charging infrastructure, can be a real accelerator in the ramp up towards electrification.”
Mercedes CEO and European Automobile Manufacturers’ Association president Ola Källenius also welcomed the move but sounded a note of caution: “We appreciate the focus on the proposed CO2 relief measures for 2025 for passenger cars and vans. But let me be clear about our primary concern: how do we chart the course to 2035 with the necessary flexibility and pragmatism to make this transition work? This is the fundamental question we would like to address during the next strategic diaglogue with the Commission.”
The view from the UK
The UK’s current zero-emissions vehicle mandate remains in place unchanged, thus manufactures are legally required to sell an ever-growing proportion of electric cars each year up to 100% in 2030. Under pressure from manufacturers, a consultation was announced in November seeking input on how the mandate could be made more equitable while still achieving its ultimate goal. We have yet to see the results of that consultation.
If the Commission’s bill is adopted by the EU, the UK government won’t necessarily follow suit. However, changes at the EU level could make the UK’s position untenable. We asked both the Department for Transport and Society of Manufacturers and Traders for comment but, at the time of writing, they have yet to respond.