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Carmakers Attack EU Fuel Economy Targets

Carmakers Attack EU Fuel Economy Targets.

Environmentalists Say New Rules Aren’t Tough Enough.

“Delivering a 37.5% CO2 reduction might sound plausible, but is totally unrealistic based on where we stand today”

The European Union agreed tough automobile fuel economy targets for 2030 and was quickly attacked by vehicle makers for being unrealistic, while environmentalists said the measures didn’t go far enough.

The new rules call for average fuel economy across manufacturer’s fleets the equivalent of about 92 miles per U.S. gallon by 2030, up from 57 mpg in 2021.

This can only be achieved by a huge contribution from electric cars. Given battery electric cars’ high price and lack of utility, that bodes ill for everyday motorists commuting to work. It requires a huge improvement in the range of electric cars and a large dive in price.

The European Commission, the EU’s executive, and the European Parliament have been at loggerheads about the new menu of CO2 targets for 2025 and 2030. The European Parliament rejected the EU Executive’s proposal of a 15% extra cut by 2025, rising to 37% by 2030. In October the Parliament wanted a 20% cut in 2025, rising to 40% by 2030, and a requirement that 35% of all new cars sold in the EU in 2030 must be low or zero emissions vehicles. In the end, the agreement was for a 37.5% cut by 2030 to 59 g/km from 2021’s level of 95 g/km, with no mandate on the number of electric cars sold.

Parliament needs to approve the rules before May’s elections.

The European Car Manufacturers Association, known by its French acronym ACEA, wasn’t happy. The rules assumed an improvement in technology that was unrealistic.

“Delivering a 37.5% CO2 reduction might sound plausible, but is totally unrealistic based on where we stand today. Industry deplores that this 2030 target is driven purely by political motives, without taking technological and socio-economic realities into account,” ACEA said in a statement.

More electric vehicles needed
“Indeed, they (the regulations) will require a much stronger market uptake of electric and other alternatively-powered vehicles than is currently proving possible,” said ACEA Secretary General, Erik Jonnaert.

Jobs will be lost.

“Undeniably, these extremely ambitious CO2 targets will have a seismic impact on jobs across the entire automotive value chain, which employs some 13.3 million Europeans. In order to mitigate the negative impact of these structural changes, policy makers need to act swiftly by presenting concrete plans to manage this employment and skills transition in a proper, socially-acceptable way,” the ACEA statement said.

Brussels-based environmental lobby group Transport and Environment (T&E) reckoned the new rules were pointing Europe in the right direction, but the pace was too slow.

“Europe is shifting up a gear in the race to produce zero emission cars. The new law means by 2030 around a third of new cars will be electric or hydrogen-powered. That’s progress but it’s not fast enough to hit our climate goals,” said Greg Archer, clean vehicles director at T&E, said.

“This regulation is a good deal for citizens: reducing fuel costs for drivers, creating over 200,000 jobs and reducing our dependence on imported oil. However, carmakers’ successful scuppering of more ambitious targets means governments will now need to do a lot more at national level to bring down transport emissions,” Archer said.
Investment researcher Evercore ISI suggested the new rules might nudge the industry towards greater cooperation on engine development.

Tough stretch
“This (the new regulations) are a tough stretch for the industry and is at the higher end of expectations, which were for a 30 to 40% reduction. However, we are convinced that this will help the industry to finally accept that combustion engines and platforms need to be standardized and globalized. Complexity must to be reduced to overcome the industry’s largest dilemma,” Evercore ISI analyst Arndt Ellinghorst said.

The automotive industry’s ability to hit the 2030 might seem moot to some, who see the immediate 2021 still posing a huge hurdle. In a report in early January, PA Consulting said eight out of 13 European manufacturers were facing difficulties with 2021, and Volkswagen of Germany and PSA Group of France faced huge fines.

As well as VW and PSA, Ford, Fiat, BMW, Daimler, Mazda and Hyundai-Kia are going to miss their 2021 targets, PA Consulting said.


  

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