According to foreign media reports, the European Commission recently decided to give automakers three years to meet new carbon dioxide emission targets for automobiles and vans, rather than just one year.
European Commission President Ursula von der Leyen said on March 3 after meeting with automotive industry executives, unions and event groups that the EU Executive Committee will propose later this month to allow businesses to meet standards within three years rather than needing compliance in 2025. Now, compliance will be determined based on the average emissions from automakers between 2025 and 2027.
Von der Leyen said at a press conference, “The (carbon emission) targets remain unchanged, and European car companies must achieve these goals, but now there is three years of breathing room.” However, von der Leyen added that the proposal still needs to be approved by EU governments and the European Parliament.
Shares of European automakers such as Volkswagen, Renault, BMW and Mercedes-Benz rose 1.5% to 4%.
Italy and the Czech Republic, which have been pushing for easing emission penalties in response to the EU’s move, welcomed it. Italian Industry Minister Adolfo Urso said it saved the European auto industry, but Czech transport minister Martin Kupka said the Czech Republic would strive to extend the grace period to five years.
Oliver Blume, CEO of Volkswagen, Europe’s largest automaker, said he welcomed the European Commission’s “pragmatic approach” that neither affects CO2 reductions, but also provides automakers with flexibility to launch new models that are affordable to stimulate demand.
Renault said that as the electric vehicle market grows, the flexibility of the European Commission will enable EU automakers to reduce emissions and remain competitive.
Sigrid de Vries, Director-General of the European Automobile Manufacturers Association (ACEA), said the proposal is positive, but it remains challenging to achieve emission targets. Matthias Zink, chairman of the European Auto Parts Suppliers Association (CLEPA), said the proposal provides “limited space for mitigation.”
The European Automobile Manufacturers Association, which has been seeking a longer extension, has said the European auto industry faces some difficult options, including sharp price cuts, production cuts, or buying carbon points from U.S. electric car maker Tesla and Chinese electric car manufacturers.
However, some automakers and institutions have questioned the EU’s proposal to relax carbon emissions.
Volvo Cars said companies that are ready to meet their 2025 carbon emission targets should not be disadvantaged by last-minute changes. European transportation research and activities organization T&E described the proposal as an unprecedented “big gift” to the automotive industry, which will further lag Europe behind China.
T&E executive director William Todts believes that “the key to competitiveness lies in being able to produce electric vehicles at prices that Volkswagen consumers are willing to accept. This is exactly what Chinese automakers do. Delaying carbon emissions in Europe will not enhance the competitiveness of European automakers.”
The EU’s carbon emission target originally needed to meet in 2025 means that most auto companies will sell at least one-fifth of their total sales to avoid high fines. The EU’s ultimate goal is to achieve zero emissions by 2035.
To achieve these goals and avoid related fines, more electric vehicles are required to be sold, and in this area, European automakers lag behind Chinese and American competitors.
EU automakers have closed several factories in recent years due to a drop in demand, and are still preparing for the U.S. tariffs. They have urged the European Commission to exempt the fine, saying that the fines in 2025 could reach as high as 15 billion euros (about 15.7 billion US dollars).