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EU to relax CO2 emission targets for automakers

EU to relax CO2 emission targets for automakers

The European Commission published a proposal on Tuesday to relax the rules. This will give automakers three years to meet the EU CO2 emission targets of 2025 for cars and vans.

The European automakers had requested Brussels to ease the targets. These depend on selling more electrical vehicles, an area where they are behind their Chinese and U.S. competitors.

According to the changes proposed on Tuesday, compliance with CO2 regulations for 2025 would be based on the average emissions of a carmaker over the period from 2025-2027 rather than only this year.

In a press release, Ursula von der Leyen, President of the Commission, said: "With today's announcement, we grant greater flexibility to this sector and, at the same, we remain on track with our climate goals."

Von der Leyen promised earlier this month that he would give automakers a "breathing room" regarding the rules, after European auto manufacturers stated the original targets may result in up to $15 billion in fines ($16.2 billion) for the industry if they missed the goals.

This year, the tighter EU carbon dioxide emission limits for carmakers came into effect. These require that at least one fifth of all sales from most car companies be electric vehicles.

The European Parliament must approve the proposal made on Tuesday to amend the law. EU member states can also propose additional changes. The Czech Republic, which is a major hub for automobile manufacturing, had previously stated that it would push to have a five-year period of compliance.

The European auto industry has already been affected by a drop in demand and factory closures. Now, they are bracing themselves for U.S. Tariffs.

Volkswagen and Renault have both expressed their support for an extension of the compliance period, but not everyone in the industry has agreed.

Volvo Cars - which is owned in majority by Chinese electric vehicle maker Geely - warned against penalizing companies who have invested to ensure they can meet the 2025 targets.

E-Mobility Europe, a group representing the electric transport industry in Europe, has warned that changing the CO2 limit for 2025 will further put Europe behind China when it comes to EVs. It also discourages investments in charging infrastructure.

The EU has also set a long-term climate goal for all new cars to be sold after 2035, with zero emissions. This effectively ends the sale of new combustion engine vehicles.

Some EU legislators and member governments are planning to oppose this target when the policy is reviewed later this year. They claim it will harm already struggling carmakers.

The European Commission, however, has refused to change the 2035 goal. It says that this is essential for achieving green goals and ensuring a predictable investment climate over time. $1 = 0.9251 euro (Reporting and editing by Kate Abnett, Philip Blenkinsop)

(source: Reuters)