Commission hardens its stance against carmakers ensuring emissions reductions targets

Visit by Miguel Arias Cañete, Member of the EC, to Portugal
Date: 27/07/2018. Location: Portugal,Lisbon. © European Union , 2018 Source: EC – Audiovisual Service

The car industry will be under tighter surveillance by the European Commission after 2020 when the next phase of the EU’s emission regulation will take place. All car manufacturers who do not meet the 2021 fleet CO2 emissions compliance for new passenger vehicles sold in the Old Continent will face fines of more than €14 billion.

The fact that automakers were found by the EC to manipulate emissions for the 2021 targets seems quite worrying. The executive body of the EU states will put all the necessary work in order not to let all these “tricks” affect the emission standards.

The moment all that is taking place, eleven governments have requested from the EC to raise their ‘emission ceilings’ as they failed to remain under the air pollution limits. How will the Commission react to that? Will they be sent to court as it was previously done with a number of governments earlier this year?

Background

Cars account for almost 12% of the total carbon dioxide (CO2) emissions in the EU. Last November, the EC presented its proposal defining new CO2 emission standards for passenger cars and light commercial vehicles (vans) in the European Union for the period after 2020. The 2021 CO2 emission target implies that by 2021, phased in from 2020, the fleet average should be achieved by all new cars is 95 grams of CO2 per kilometer. The penalties for the automakers if average CO2 emissions of the fleet exceed its limit value will be 95 euros from the first exceeding gram onwards.

Car industry risks

An analysis published by IHS Markit shows that automakers are most likely to be fined with more than 14 billion euros if they do not meet the European CO2 Emissions target in 2021. The latter business information provider forecasts that the sales-weighted passenger car fleet CO2 average will reach 122,9 g/km with a 2021 target of 114,9 g/km. The later could lead up to 14 billion euros in excess emission premiums.

More in detail, Vijay Subramanian, associate director for the IHS Markit powertrain and compliance business in EMEA, said that: “The current expectation considers each OEM we expect to be selling cars in the region during the forecast horizon. As we continue to follow OEM technology developments and any regulatory adjustments, our forecasts may be adjusted accordingly. If they (manufacturers) are unable to meet compliance targets in time, IHS Markit forecasts that average fines for those not complying could reach €624 per vehicle at the end of 2020, with a further €190 increase in 2021.”

Automakers still cheat tests

After the VW dieselgate scandal in 2015 when the German giant automaker was found to intentionally programming diesel engines to activate their emissions controls only during laboratory emissions testing while emitting up to 40 times more NOx in real-world driving, the EU regulators discovered that there are still carmakers who outsmart emission test results in order to look worse than they are.

More in detail, the commission’s Joint Research Centre mentioned that it found evidence from 114 data sets showing that some carmakers were “configuring their test vehicles in such a way that the measured worldwide light vehicles test procedure are inflated”. This strategy, which is opposite to the one of VW, aims at artificially increasing emissions in order to achieve targets which are much easier to be reached.

This method is against to what the EC stands for as the protection of air quality is set to be high priority. Miguel Arias Cañete, EU commissioner for climate, when interviewed by the Financial Times said: “We don’t like tricks. We have seen things that we don’t like. We are going to do all the necessary work so that the starting points are the real ones.”

EU countries fail to reduce air pollution emissions

The governments of Austria, Belgium, Denmark, Finland, France, Germany, Hungary, Ireland, Luxembourg, Spain and the United Kingdom have asked from that EC to increase their 2016 emissions limits as they actually breached them. Some of the reasons that the above eleven governments claim to cause this action are the VW Dieselgate scandal and the increasing impact of agricultural emissions on urban air pollution.

However, countries such as Germany, the UK and France are perseveringly failing to improve their air quality. In a letter sent by the European Environmental Bureau (EEB), AirClim and ClientEarth to European Commissioner Karmenu Vella, EEB Secretary General Jeremy Wates said that “the use of inventory adjustments should be kept to the strict minimum and that it should be considered whether governments have taken any action to tackle additional emissions before granting any adjustments.”

All in all, the automakers seem to continue cheating at the emission tests in order to manage the targets and be able to meet the EU regulation standards without being fined. It is therefore up to the EC’s hands to strengthen its controls ensuring market surveillance and compliance.

Only by doing so the targets will be met effectively contributing not only to the transition to a low-carbon, secure and competitive economy but also to the achievement of the Paris agreement.