The EU should refrain from “punitive” fines on carmakers that fail to meet emissions standards, the German chancellor has said, adding to the heated debate on the future of the key European industry.
Olaf Scholz, who is running for re-election in February at a time when Germany’s biggest carmaker, Volkswagen, is planning unprecedented plant closures in its home market, made the comments after meeting fellow EU leaders in Brussels.
His intervention comes days before the sector faces stricter standards on cutting carbon emissions from their new cars. From 2025 until 2029 the average new car in Europe should emit no more than 93.6 grams of CO2 for each kilometre, to get the industry on track for the phase-out of petrol and diesel vehicles from 2035.
Carmakers that fail to meet these targets, which are measured by fleet averages, face fines of €95 (£75) for every gram of CO2 above the target.
The European Automobile Manufacturers’ Association, an industry lobby group, has said carmakers risk multibillion-euro fines that could otherwise be invested in the switch to electric and zero-emission vehicles.
The industry has argued for a rethink amid falling sales of electric cars in Europe, while it faces intense competition on EVs from subsidised Chinese rivals.
The European Commission said on Thursday that a “strategic dialogue” on the future of the European car industry would launch in January “with a view to swiftly proposing and implementing measures the sector urgently needs”. Its president, Ursula von der Leyen, said: “We need to support this industry in the deep and disruptive transition ahead.”
The 2025 target was set by EU lawmakers in 2019, after a proposal in 2017. Campaigners argue the industry has had plenty of time to prepare, but carmakers say there has been a profound shift in the economic climate, as European car sales are still below pre-pandemic levels.
Alex Keynes, the cars policy manager at the thinktank Transport & Environment, said: “The car CO2 regulation is one of the key and most important and effective pieces of climate legislation the EU has, and is so effective in part because of the dissuasive fines that are inbuilt into the regulation.”
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Any removal of fines for non-compliance “essentially renders the regulation toothless”, he added. “So you don’t effectively have any targets if you don’t have any fines.”
According to Transport & Environment’s research, nearly all carmakers met the 2020-21 target or missed it by only a small margin, despite concerns in the preceding years about fines.