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Europe’s Carmakers Seek Delay In EU’s Costly CO2 Rules

german manufacturing

german manufacturing

The European auto industry has asked the European Union (EU) to delay the implementation of its CO2 emissions rules because the impact of the coronavirus is causing short-term mayhem in the industry.

The rules start this year, get harsher in 2025, and demand an effective average fuel economy of 92 miles per U.S. gallon by 2030.

The European Automobile Manufacturers Association, plus the tire makers, suppliers and dealers associations made the plea in a letter (see www.acea.be) to Ursula von der Leyen, President of the European Commission dated March 25.

“No production, development, testing or homologation work occurs for the time being (because of the impact of the coronavirus). This upsets the plans we had made to prepare ourselves for complying with existing and future EU laws and regulations within the applicable deadlines set in these regulations. We believe therefore that some adjustment would need to be made to the timing of these laws,” the letter said.

“Please be assured, however, that it is not our intention to question the laws as such nor the underlying objectives of road safety, climate change mitigation and protection of the environment.  Looking into the future, industry, and policymakers must together, and in a timely manner, start planning for the period beyond the immediate health crisis,” the letter said.

The EU Commission hasn’t replied to a question seeking its reaction to this plea.

Brussels-based environmental lobby group Transport & Environment wasn’t happy, saying that such a plea is unfounded and potentially damaging for the long-term sustainability and competitiveness of the car industry in Europe.

Asked to comment on the joint letter, the European Auto Manufacturers Association, known by its French acronym ACEA, said the industry has been halted by the virus in this statement.

“The primary concern of ACEA and all its members right now is to manage the immediate crisis facing the auto industry, which has essentially come to an abrupt halt – something the sector has never experienced before,” Director General, Eric-Mark Huitema said.

“Our first priority is to protect the health and jobs of the almost 14 million Europeans who work directly or indirectly in this sector. In parallel, we are active in directing resources to help fight the ongoing health crisis, for instance by providing vehicles and where possible medical equipment and protective gear.”

“In this emergency context, it has not yet been possible to undertake a detailed analysis of the implications of this crisis on legislation affecting our industry. Nonetheless, ACEA has already drawn the European Commission’s attention to the fact that there will inevitably be consequences in this domain, given that no production, development, testing or homologation work is able to happen now or in the foreseeable future due to company shutdowns and other measures to contain the virus.”

“This will require discussions between the industry and policymakers in due course. In the meantime, ACEA will work with its members to examine what the practical implications are for the most critical legislative issues. As a general principle, it should be stressed that it is not the industry’s intention to question any laws as such nor the underlying objectives of road safety, climate change mitigation and protection of the environment for example,” Huitema said.

The industry has been alarmed about the impact of the CO2 rules, even before the coronavirus struck, not least because the EU Commission had been talking about making the rules even tougher.

According to a report from investment researcher Jefferies last year, if the auto industry makes no progress in curbing CO2 from 2018 towards meeting the EU’s 2020/21 regulations, it faces fines totaling the equivalent of $36 billion, twice its estimated profits, and could be forced to raise prices up to 10%.

The latest data suggests in 2019, the industry went backward not forwards in production of CO2 thanks to the popularity of SUVs and the demise of diesel.

Read rest at Forbes