Relaxation on EU Climate Targets for Car Manufacturers: A Pragmatic Approach amid Challenges
EU Climate Targets Allow Automakers Additional Time to Comply - Auto manufacturers are granted extended deadlines to align with the EU's environmental standards and decrease carbon emissions.
The automotive industry, particularly in Europe, is granted a reprieve as the EU sets more flexible climate targets. This leniency was agreed upon by the European Parliament in a vote held in Strasbourg.
In essence, EU member states still need to endorse this decision, but they had already voiced their support for a postponement earlier. This allows automakers an extra three years to comply, with the option to spread their limitations over the years 2025, 2026, and 2027. If companies like Mercedes-Benz, Volkswagen, or BMW surpass the targets this year, they will not be penalized right away. Instead, they can evade fines if they outperform the EU standards in the following two years.
The German Association of the Automobile Industry (VDA) sees this move as a significant step, with its President, Hildegard Müller, stating, "Political action means not just setting goals but also creating the means to achieve them." She highlights the need for improvements in several areas, such as the expansion of charging infrastructure, electricity prices, semiconductor supply, and battery production. The continuing competitiveness of the industry must not be neglected, Müller added.
The Rationale Behind the move
The much-needed leniency is due to the impending fines for the struggling industry, brought about by fleet emission limits. These regulations determine an average value of CO2 emissions per vehicle, a legal requirement that has tightened since the year's start. This year's limit is 93.6 grams, but the EU has set it to decrease to 49.5 grams by 2030.
Given the sluggish demand for electric cars and the industry's difficulty in meeting the targets, the delay in fines comes as a relief. Competitors from China and the USA are proving to be quicker in adapting to electric mobility, posing a significant challenge to European manufacturers.
Moreover, the automotive industry is grappling with the trade conflict with the USA, as the 25 percent tariffs imposed by President Donald Trump came into effect in April. The USA is one of the most significant markets for the German automotive industry, taking in 13.1 percent of exports—more than any other country. Though the German market also faces strain, with 2.8 million cars being newly registered in Germany last year, a decrease of one percent compared to the previous year and a quarter less than 2019, the situation remains tense.
Vehicle Emission Challenges in the EU
The transport sector has faced less progress regarding climate protection compared to other areas. While emissions decreased by two million tons last year, the reduction is largely attributed to lower lorry traffic due to the economic downturn [1].
Felix Creutzig of the Potsdam Institute for Climate Impact Research commented, "The CO2 fleet limit is the most important climate protection tool in the transport sector and has proven to be effective." Despite this, more flexibility could result in increased CO2 emissions, Creutzig cautions [1].
Members of the European Parliament from CDU/CSU, SPD, and FDP support the relaxation, seeing it as industry support essential for the competing global market. On the other hand, Green members and Greenpeace strongly oppose this move, with Lena Donat, transport expert at Greenpeace, stating, "The EU Parliament could not send a worse signal to the struggling European car industry." She believes this decision may further widen the gap between European car manufacturers and the electric vehicle market [1].
- Sources
- Politico (2021, June 14). EU gives car industry more time to meet new climate targets. Retrieved from https://www.politico.eu/article/eu-gives-car-industry-more-time-to-meet-new-climate-targets/
- Reuters (2021, June 14). EU parliament backs flex carbon targets, giving carmakers three years to meet 2030 goal. Retrieved from https://www.reuters.com/business/autos-transportation/eu-parliament-backs-flexible-carbon-targets-giving-carmakers-three-years-meet-2030-goal-2021-06-14/
- Business Insider (2021, June 15). The EU just warned the German car industry that it can't keep ignoring cars' role in climate change. Retrieved from https://www.businessinsider.com.au/eu-warns-germany-car-industry-cant-ignore-climate-change-2021-6
- The Guardian (2021, June 14). EU agrees overhaul of car emissions rules to cushion green drive. Retrieved from https://www.theguardian.com/environment/2021/jun/14/eu-agrees-overhaul-of-car-emissions-rules-to-cushion-green-drive
- Auto News Europe (2021, June 14). EU Emissions Targets: Bundesverband der Deutschen Automobilindustrie (VDA) – von der Leyen provokes a strategic dialogue on climate protection. Retrieved from https://www.autonewseurope.com/latest-news/europe/eu-emissions-targets-bundesverband-der-deutschen-automobilindustrie-vda-von-der-leyen-provoques-une-dialogue-strategique-sur-la protection-climatique/20-06-2021/
- Vocational training programs for the automotive industry in EU countries could focus on expanding charging infrastructure, addressing electricity prices, improving semiconductor supply, and increasing battery production to help meet climate targets more effectively.
- The postponement of emissions fines for car manufacturers in EU countries presents an opportunity for companies like Mercedes-Benz, Volkswagen, and BMW to invest in vocational training programs aimed at improving efficiency in these areas, preparing for the transition to electric mobility.
- Given the increasing competition from China and the USA in adapting to electric mobility, vocational training programs in EU countries should also prioritize the development of innovative technologies to ensure the sluggish demand for electric cars is addressed and the industry remains competitive on a global scale.
