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European carmakers face fines for falling short of CO2 targets

Eight of Europe’s largest carmakers are on course to miss carbon dioxide emissions targets that come into force in 2021, leaving them facing the prospect of billions of euros in fines, a research group has warned.

Only four of the 12 largest companies - Peugeot Citroën, Toyota, Renault-Nissan and Volvo - are on track to hit incoming EU targets, according to PA Consulting, which advises groups on manufacturing and technology.

Volkswagen, BMW and Fiat Chrysler are the furthest behind in the type of electric car development that is required by the rules to offset pollution from other vehicles, the consultancy found.

Focus on car emissions has come to the fore since the VW diesel scandal last year exposed the huge discrepancies between laboratory tests and pollution levels when driving on real roads.

The EU wants to clamp down on both poisonous nitrogen oxide (NOx), emitted by diesel cars, and carbon dioxide (CO₂), which is released by all cars.

VW could face a penalty of €1bn if it breaches the target of 95 grammes of CO₂ per km, according to projections drawn up by PA.

A spokesman for VW said it “remains committed to achieving the regulatory vehicle CO₂ targets for Europe” and the company would sell more electric and hybrid cars in the future after “recently announced plans to expand considerably our investment in electric vehicle technology”.

Under the new rules, each carmaker’s target for CO₂ emissions is set according to the average weight of the vehicles it sells.

CO2 report front cover

The carmakers race to 2021 has started

Download the report

A company selling heavier cars such as BMW or Mercedes-Benz-owner Daimler, faces more lenient targets, whereas Peugeot Citroën has more stringent goals.

Companies can reduce emissions of CO₂ by making their vehicles lighter, downsizing the engines or installing hybrid or electric technology.

Using diesel cars - which emit a fifth less CO₂ than petrol equivalents - is no longer the easy option it once was because of stringent NOx rules that also come into force at the same time.

The companies on track to meet their targets are those that are furthest ahead in electric and hybrid vehicles, said Thomas Goettle, automotive expert at PA.

“We know they need electric cars to hit the numbers otherwise they have no chance,” he said. “There are some that can still make it, and others that are struggling quite a lot.”

PA, which advises many of the companies on manufacturing and technology, predicts that BMW will receive a fine of €350m and Fiat Chrysler a €600m penalty for falling short of the targets.

Fiat’s results are dragged down by its Chrysler and Jeep brands, which sell larger cars, and by its lack of clear plans for mass electrification of its fleet, the report said, while BMW’s sales of its electric i3 car have disappointed.

While Jaguar Land Rover’s emissions will be in breach of the limits, PA forecasts, the British carmaker faces kinder targets unless it sells more than 300,000 cars into the EU by 2020 — three times its current sales levels.

Click here to download a copy of the CO₂ ranking report

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