The automotive sector expressesapprehensions about potential reductions due to EU's climate objectives.
In a stark warning, an industry report predicts massive job losses and hefty fines in the European automotive sector due to intensifying EU climate laws. This report suggests utilizing a crisis management strategy used during the coronavirus pandemic as a potential solution for car manufacturers.
The crisis stems from the stringent fleet emission limits imposed by the EU. These regulations establish a maximum allowable CO2 emission level for vehicles registered in a given year, which the automotive industry is struggling to meet. The paper indicates that the industry faces potential fines in billions if it fails to comply with these emissions standards.
To evade these fines, companies are forced to drastically reduce their production, a move that could endanger millions of jobs within the EU. The document cites the fleet emissions limits imposed by the EU as the primary culprit for this predicament.
Currently, these limits limit the CO2 emissions of vehicles to 115.1 grams per kilometer, which is planned to decrease to 93.6 grams by 2025 and further to 49.5 grams by 2030. Manufacturers are forced to pay penalties for exceeding these limits.
The European Automobile Manufacturers' Association (ACEA) confirmed its awareness of the paper, albeit stressing its unofficial status within the lobby association. According to reports, the document is genuine and has been circulating within the European automotive industry.
Billions in fines loom
The report claims that it is not feasible to build combustion engines that emit less than 95.6 grams of CO2 per kilometer. Only a handful of hybrids manage to meet this target, although they can theoretically help manufacturers stay below the limit by registering more electric vehicles.
Furthermore, the paper suggests that an efficient combustion engine produces about 120 grams of CO2 per kilometer. Thus, four combustion engine vehicles would need to be offset by one electric vehicle to avoid fines. However, the proportion of registered electric vehicles remains stagnant and is far from the mandatory threshold.
Consequently, the automotive industry may face fines amounting to 13 billion euros due to the sale of passenger cars alone. Additional fines of 3 billion euros would be imposed on light commercial vehicles such as vans, which are also subject to these regulations.
Up to eight factories could shut down
The report proposes curbing the production and sale of more than 2 million cars with combustion engines to avoid fines. This corresponds to the capacity of eight factories, potentially leading to millions of job losses.
To avoid this, the paper suggests employing an emergency measure implemented during the coronavirus pandemic. By invoking this provision, the EU Commission could potentially postpone the introduction of more stringent regulations by two years.
Environmentalists voice outrage
Environmental organizations have criticized the industry's response to the issue. Sebastian Bock, CEO of Transport & Environment Germany, criticized the automakers' demand for more time to continue selling vehicles with high emissions.
Bock questioned the reasoning behind demanding an emergency declaration to sell fewer environmentally friendly vehicles. Meanwhile, Greenpeace criticized Volkswagen's chairman for requesting additional time for climate protection two years later when the emission limits were established.
In conclusion, the report predicts significant financial and employment penalties for the automotive sector due to the tough EU emission rules. To mitigate these impacts, companies may seek to invoke emergency measures to delay the implementation of stricter regulations, but environmentalists remain skeptical of this approach.
The report highlights the challenge faced by automobile manufacturers in adhering to the EU's fleet emission limits, resulting in potential fines worth billions for non-compliance in the manufacture of motor vehicles. To avoid these penalties, substantial reductions in vehicle production might necessitate, adversely affecting employment in the sector.
