Study finds carmakers face billions in European CO2 fines

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Big-name carmakers including Volkswagen and Fiat Chrysler face fines running into the billions for failure to meet tough new European carbon dioxide emissions limits slated for 2021, a study has found.

Complex challenges

"Only four out of 11 carmakers are forecast to meet the EU 2021 CO2 emission target, with the rest facing significant fines," researchers from British firm PA Consulting said in a statement Friday.

Lots of carmakers will be unable to get their emissions under control by the deadline. /Reuters Photo

The EU nations agreed in 2014 that carmakers should limit CO2 emissions to 95 grams per kilometer across their entire model range within seven years. An average figure for 2015 stood at some 130 grams per kilometer.

If the target is not met, the groups must pay fines of 114 US dollars per gram over the limit, multiplied by the number of cars they sell in 2020.

"Most carmakers will face penalties," especially German manufacturers which often offer larger, more polluting engines, the study authors forecast. "There is nothing less than a revolution facing the car industry and those manufacturers who fail to keep up face potential fines in the billions," PA auto expert Thomas Goettle said.

Vollkswagen's logo /Deccan Herald Photo

Great pressure

Germany's BMW, Volkswagen and Daimler, US-based Ford, Italian-American Chrysler, France's PSA and South Korea's Hyundai will be unable to get their emissions under control by the deadline, according to the study.

As the world's largest carmaker and owner of Audi and Porsche, Volkswagen could suffer a penalty of 2.03 billion US dollars, while Brussels' bill for Fiat Chrysler could reach 1.43 billion, the forecasts suggest.

To secure long-term supplies of cobalt, a vital component of rechargeable batteries, Volkswagen plans to invest more than 24 billion US dollars in zero-emission vehicles by 2030, reported Reuters.

An electric Volkswagen car is plugged into a recharging point in central London. /Reuters Photo

As the group accelerates its ambitious shift to electric cars, Volkswagen aims to make up to three million electric vehicles a year by 2025, wanting all the cobalt tender proposals submitted by the end of September. According to cobalt industry sources, Volkswagen has asked producers to submit proposals on supplying the material for up to 10 years from 2019.

In fact, German carmakers have announced a flood of electric models for the coming years as emissions scandals have tarnished the image of diesel, which they had bet on to reduce the CO2 toll.

But the new technology will arrive too late on the market to spare the firms from hefty bills in 2021.

Source(s): AFP ,Reuters