Carmakers face ‘significant fines’ from 2021 EU CO2 emission targets

The majority of car manufacturers could face “significant fines” for missing their 2021 EU CO2 emissions targets, according to PA Consulting.

In its ‘Driving into a low emissions future’ report, published this week, the firm predicts that eight out of 13 car makers will miss their specific CO2 targets.

The new regulations set each car maker a specific CO2 output target, which is averaged over its whole range of cars.

The targeted average across the whole industry is 95g/km of CO2 but the individual requirement varies depending on the weight and size of vehicles built and how many of them the manufacturer sells each year in Europe.

In the event of a no-deal Brexit, the UK Government has already got plans in place for system that mirrors the EU target, but based on UK sales.

Volkswagen faces the largest fines, with current predictions of up to 1.4 billion euros.

PSA could be the hardest hit financially, with a 600 million euro fine representing 20% of its 2017 profit.

Ford, Fiat, BMW, Daimler, Mazda and Hyundai-Kia are also expected to face fines.

Toyota remains the best performing manufacturer in the ranking, Renault Nissan Mitsubishi lists second and Volvo third (down from second last year).

Daimler and BMW are making progress towards their targets and Jaguar Land Rover still has the highest CO2 emissions, but is on track to meet its specific target.

“Carmakers are running out of time to improve performance quickly enough to avoid fines. Marketing, sales and pricing strategies that increase the take-up of low emissions vehicles will be key in getting manufacturers closer to the targets,” said Michael Schweikl, automotive expert at PA Consulting.

The Worldwide harmonised Light vehicles Test Procedure (WLTP) cycle, which is part of the 2021 regulations, introduces more realistic testing conditions, providing an accurate basis for calculating fuel consumption and CO2 emissions. It is predicted that it will increase CO2 emissions by an average of 20%.

Schweikl added: “Carmakers need to look beyond 2021. The European Parliament voted to introduce rules that would force car makers to lower their 2020 CO2 emissions targets by 40% by 2030. The final agreement could be closer to a compromise of 35% reduction by 2030 if all EU stakeholders agree on this latest proposition from environment ministers group.

“As such, car makers face a huge change in what they do as they move from the old technology of combustion engines to low emission electric vehicles. While much exciting technological development is already underway, manufacturers cannot underestimate the complexity, cost and cultural change required.”

How carmakers rank on CO2 emissions:

*rank on 2021 forecast | **data from ICCT 2017 | ***based on actual data until 2017 (ICCT) and PA forecast estimation