We’re usually the bearer of bad news when we talk about decisions taken by the European Union. But that’s not the case today. While emissions regulations remain just as strict as before, automakers have been granted extra time to meet the new targets for 2025. Instead of being forced to comply by the end of this year, car companies now have two additional years to reduce their fleet-wide average CO₂ emissions.
The European Parliament voted in favor of the European Commission’s proposal to allow automakers to meet their targets based on average emissions over the 2025–2027 period, rather than just 2025. The vote passed with 458 in favor, 101 against, and 14 abstentions. For context, this year marks the start of a 15 percent annual reduction target for the 2025–2029 period compared to the 2020-2024 interval, requiring companies to average 93.6 g/km.
From 2030, the EU will impose an even stricter fleet-wide emissions target of 49.5 g/km, followed by an ambitious, some might say unrealistic, 0 g/km target from 2035. Technically, gas and diesel engines won’t be outright banned by the middle of the next decade. However, unless synthetic fuels or hydrogen-burning combustion engines gain significant traction over the next 10 years, we might as well prepare to say goodbye to new ICE vehicles in the 27 EU countries.
In the meantime, automakers are breathing a sigh of relief, knowing they no longer need to meet the latest target by 2025. Rolf Woller, Head of Volkswagen Group Treasury and Investor Relations, estimated earlier this year that the company could’ve faced about €1.5 billion in fines for exceeding emissions, or nearly $1.7 billion at current exchange rates.
Another major player, Stellantis, warned late last year through its European COO Jean-Philippe Imparato that it might cut production of gas and diesel vehicles to avoid missing CO₂ targets. Renault boss Luca de Meo also expressed concern, estimating that automakers could collectively pay as much as €15 billion (almost $17 billion) in fines.
To be clear, nothing is stopping car companies from building high-emission vehicles. Mercedes can sell as many V-12 S-Class sedans as it wants, but it must offset them with plug-in hybrids and especially EVs. BMW can V-8 all the things and still avoid penalties, as long as its overall sales mix includes enough electrified models.
Manufacturers without robust EV lineups are at risk. Mazda, for example, had to drop the 2.0-liter engine from the MX-5 Miata in Europe, leaving only the smaller 1.5-liter version. Aston Martin CEO Adrian Hallmark also said the company’s V-12 will be phased out by the end of the decade for the same reason.
Emissions Problems:
Toyota Hit With Astronomical Fine for Cheating Diesel Emissions
Stellantis Fined Millions for ‘Unapproved’ Diesel Emissions Cheat Device
Adding to the challenge, taxes on high-emission cars have skyrocketed in several European countries in recent years. That’s how a Honda Civic Type R costs six figures in the Netherlands, or a Toyota GR Yaris commands an insanely steep price in France.
Given all this, maybe it’s time to stop criticizing BMW for putting a plug-in hybrid V-8 in the new M5. It was a necessary compromise. Otherwise, the powertrain would’ve had to be downsized. Meanwhile, rival Mercedes arguably went too far with the C63 by replacing its beloved V-8 with an overly complex electrified four-cylinder. AMG is now trying to make amends by developing a new V-8, which could power future models, though the C63 won’t be one of them.
Source: European Parliament