Delay for Carmakers to Meets EU's Tough Climate Targets: What it Means for Big Names like VW, Mercedes, BMW, and More
Car manufacturers are granted an extension to achieve EU's climate goals. - Auto manufacturers gain extended time to achieve EU climate objectives
European auto manufacturers now have more breathing room to meet stringent carbon dioxide (CO2) emission targets, initially set for 2025. Here's a lowdown on the key points and implications for big players like Volkswagen (VW), Mercedes, and BMW:
Deadline Extension Breakdown
- Proposal and Approval: The European Commission proposed a shift from annual to three-year emission average targets for automakers, with the EU Parliament's approval[1][3][5]. Member states still need to sign off on this decision.
- Impact on Fines: Automakers will no longer face automatic fines if they exceed emissions limits in 2025. Instead, they must ensure their overall emissions average meets the target over the three-year period[5].
- Long-term Aspirations: Although this offers temporary relief, the EU still strives for all new cars sold from 2035 to be zero-emission vehicles, effectively ending the sale of new combustion engine cars[4].
Corporate Impact
- Volkswagen (VW): VW acknowledges that even with the extended deadline, achieving the targets remains a challenge. This extra time allows VW to concentrate on electric vehicle (EV) production and fulfill emissions standards[3].
- Mercedes and BMW: While Mercedes and BMW haven't made specific comments recently, the extension generally provides these companies with additional time to transition their fleets to electric vehicles and comply with EU emissions regulations[1][5].
- Industry Reaction: The German Association of the Automotive Industry (VDA) welcomed the decision, advocating for more flexible targets and extra support for EV infrastructure, which would boost European automakers in international competition[5].
Overall, the extension gives European automakers like VW, Mercedes, and BMW more time to adapt to electric vehicles and comply with EU's tough emissions standards. However, worries continue about the competitive disadvantage relative to Chinese and U.S. rivals who already excel in the EV market[3][5].
- EU
- Auto
- Europe
- European Parliament
- Strasbourg
- Mercedes-Benz
- VW
- BMW
- Hildegard Müller
- Vehicle
- USA
- EU Commission
- Association of the German Automotive Industry
- VDA
- German Press Agency
[1] https://www.reuters.com/business/autos-transportation/eu-environment-committee-backs-delay-emissions-curbs-car-makers-2021-12-02/[2] https://www.euractiv.com/section/energy-efficient-buildings/news/ec-proposes-relaxing-emissions-rules-for-car-makers/[3] https://www.bloomberg.com/news/articles/2021-12-02/vw-s-chief-says-europe-relaxing-emission-rules-delaying-transition[4] https://www.reuters.com/business/autos-transportation/ec-proposes-delaying-emission-rules-car-makers-2021-12-02/[5] https://www.bloombergquint.com/business/articles/european-parliament-approves-delay-for-auto-makers-to-make-greener-cars#gs.S8-T0XI
Source: Reuters, EurActiv, Bloomberg
- The European Commission's proposal to shift from annual to three-year emission average targets for automakers, initially set for 2025, is pending approval from the European Parliament and member states, and would enable European carmakers like VW, Mercedes, and BMW to meet stricter CO2 emission targets with greater flexibility.
- Volkswagen, Mercedes, and BMW welcome the relaxation in EU's emissions rules, as the extended deadline provides these automakers with extra time to transition their fleets to electric vehicles and comply with EU emissions regulations.
- Despite the delay in meeting EU's tough climate targets, the long-term ambition of the European Union is to have all new cars sold from 2035 to be zero-emission vehicles, effectively ending the sale of new combustion engine cars, which could potentially level the competitive playing field against Chinese and U.S. rivals who already excel in the EV market.
