France pushes for sway on EU car emissions rules

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France is pushing for “flexibility” on tougher car emissions rules next year that could spell billions of euros of fines for European carmakers already struggling with slowing demand for electric vehicles.

Antoine Armand, France’s newly appointed economy minister, on Tuesday said the French were sounding out European partners to see what could be done on the EU’s 2025 carbon emissions standards, which will impose limits on how much a carmakers’ fleet can emit.

These will hit the likes of France’s Renault, Peugeot maker Stellantis and Germany’s Volkswagen with more than €10bn in penalties unless they are able to drastically increase the portion of battery-powered cars they sell, or eliminate more traditional engine ones.

“I cannot see why there would be penalties when huge efforts [in investment] have been made [by carmakers],” Armand told auto industry executives at the Paris Motor Show on Tuesday, a biennial exhibit of car designs focused more than ever on electric versions.

“You can’t have sanctions without taking into account the economic context and the development of our industry in France and in Europe,” he said. “We’re exploring what flexibility there can be in co-operation with our European partners who are the most engaged on this question.”

Armand did not detail what shape that flexibility could take — whether it meant diminishing the penalties, changing the underlying criteria involved or pushing back the deadline. He maintained that a 2035 European deadline to phase out sales of non-electric cars was necessary to get the industry to shift.

Brussels is coming under increasing pressure from carmakers to delay or weaken its car emissions rules amid weakening demand for electric vehicles and concerns from car manufacturers that they will face millions of euros of fines for pollution.

The Italian government has also been particularly outspoken about calling for a revision of the 2035 ban with Italian Premier Giorgia Meloni dubbing it a “self-destructive policy”.

At the Paris show, Oliver Zipse, chief executive of BMW, warned that the EU ban on internal combustion vehicles from 2035 would lead to “massive shrinking of the industry as a whole”.

The German group called for an earlier review of the EU’s longer-term targets, describing them as “no longer realistic based on current market dynamics”.

However, Stellantis chief executive Carlos Tavares on Monday cautioned against watering down carbon emissions rules, warning that delaying the shift to EVs would bring higher costs for the industry needing to invest in both conventional engines and battery-run cars.

The 2025 rules mandate that carmakers overall must cut emissions by 15 per cent compared to a 2021 baseline.

So far, the European Commission has stood by the limits as well as a ban on new internal combustion engines from 2035.

At a closed-doors event in Brussels last month, officials said that the EU should stay the course on its vehicle emission limits in order to provide certainty for investors.

“The worst thing that we could do is to create further uncertainty and confusion by changing again the targets we have agreed,” a senior EU official said.

Transport is the only major sector in the EU where emissions are now higher than they were in 1990.