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New EU rules pose challenge for car manufacturers - GlobalData

New EU rules pose challenge for car manufacturers - GlobalData

Mubasher: The automotive industry in Europe is expected to face increased challenges in 2020 due to tighter regulations for CO2 emissions for cars sold in the European Union (EU), according to a recent report by GlobalData.

The industry will see a highly competitive year with new EU CO2 rules coming into effect, David Leggett, Automotive Editor at GlobalData, expects.

From 2021, but phased in from 2020, the EU fleet-wide average emission target for new cars will be 95g CO2/km, the current level is estimated to be in the region of 120g/km, making the target a serious challenge for the industry.

In 2020, the emission targets will apply for each manufacturer's 95% least emitting new cars. From 2021 on, the average emissions of all newly registered cars of a manufacturer will have to be below the E set target. The European market's shift away from diesel and the growth of crossovers and SUV segments makes the aim of reducing fleet CO2 averages in line with tighter targets much more difficult,” Leggett noted.

Otherwise, if the average CO2 emissions level of a manufacturer's fleet of vehicles sold in EU countries exceeds the EU-set target in a given year, the car manufacturer will have to pay an excess emissions premium for each car registered at EUR 95 for each g/km of target exceedance.

These fines could quickly mount up into billions of euros, with some estimates expecting a total EUR 30 billion, Leggett added.

According to the European Environment Agency (EEA) estimates that greenhouse gas emissions decreased in the EU by 2% in 2018, following a 0.6 % increase in 2017.

The reduction in 2018 corresponds to a 23 % reduction from 1990 levels, which is more than the EU reduction target of 20 % by 2020.

Since 2009, EU legislation set mandatory emission reduction targets for new cars.

The first targets were introduced in 2015, with stricter targets set to be applied from 2021, with a phase-in from 2020, as per the European Commission.

Last April, the European Parliament and the European Council adopted a regulation setting CO2 emission performance standards for new passenger cars and for new light commercial vehicles and vans in the EU for the period after 2020. The new regulation started applying on 1 January 2020.