Germany, Italy, and the Czech Republic have reportedly urged the European Union to halt financial penalties for carmakers that fail to meet the EU emissions targets starting in 2025.
After an EU leaders’ summit, German Chancellor Olaf Scholz said that adding to the industry’s challenges with fines would hinder investment in electric vehicles (EVs), reported Reuters.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
He emphasised that while automakers are introducing new EVs, consumers should not be forced to buy them.
Scholz added: “I think it’s right not to impose fines and to look into how to do this. It’s not straightforward, but I’ve had such in-depth discussions and I think a way will be found.”
He also supported the European Commission president Ursula von der Leyen’s initiative to start a “structured dialogue” with the auto sector, with outcomes to be discussed at the EU summit in March 2025.
Italy and the Czech Republic’s leaders planned to appeal to von der Leyen to eliminate the fines for missing CO2 targets, reported the media outlet, citing EU diplomats who requested anonymity.
The automotive industry could face penalties amounting to €15bn ($15.62bn) for not meeting the targets, with Volkswagen potentially being the most impacted.
The industry has expressed concerns over possible plant closures and job losses due to various challenges, including low demand, competition from China, and sluggish EV sales.
France has also joined the call against the fines, proposing to maintain the CO2 targets while finding a solution to prevent penalties next year.
French climate minister Agnes Pannier-Runacher at a meeting of EU ministers said: “The reality we are facing now is not the one we prepared for to begin with.”
The EU’s 2025 targets dictate a CO2 limit that car manufacturers must achieve on average across their sold fleets within the year.
A decline in EV sales could result in higher average fleet emissions, leading to missed CO2 goals.
While Austria, Bulgaria, Romania, and Slovakia have requested the EU to reconsider its CO2 reduction policies for cars, only a few countries, such as Sweden, which is home to Volvo, support the enforcement of fines.
