CO2 limit for passenger cars from 2021: almost 34 billion euros fine

Like the infamous sword of Damocles, the goal of the European Union hangs over the automobile industry: from 2020 and until 2021 at the latest, new cars in Europe will only be allowed to emit a maximum of 95 grams of CO2 per kilometre on average for their fleets. Anyone who emits more must pay. And that’s 95 euros for every gram – per car!

Since it currently does not look as if the manufacturers will achieve this goal, JATO Dynamics has once calculated how high the fines would be according to the current situation. Read how CO2 targets shape the industry in the long run in this blog post. The emissions levy for the major manufacturers with more than 300,000 units sold per year would amount to no less than 33.6 billion euros if in 2021, as in the previous year, they were to achieve 119.7 g/km instead of the then required 95 g/km CO2.

multi-billion fines

These fines would thus account for almost half of the total net profits of Volkswagen, PSA, Renault-Nissan, BMW, Hyundai-Kia, Ford, Fiat-Chrysler, Daimler, Toyota and Volvo. However, the sanctions were quite different: The Volkswagen Group, for example, would be asked to pay almost 9.2 billion euros – that would be more than 2,500 euros per car sold. Last year, the Wolfsburg-based company achieved an after-tax result of a good twelve billion euros. In other words, the fine would correspond to three quarters of the last global annual profit. The case of PSA would be much harder to face. The French would face sanctions amounting to 5.4 billion euros – more than half of Volkswagen’s fine. Last year, however, PSA achieved an annual surplus of “only” 2.83 billion euros.

On the other hand, it would look much better for the automobile giant Toyota. The Japanese have the lowest average CO2 emissions, mainly thanks to their hybrid series. And Toyota sells fewer cars in Europe than most of its competitors. The total fine would therefore amount to 550 million euros or three percent of the last annual profit. Not included in the scenario are possible compensations – so-called supercredits – from the sale of electric vehicles.

More information can be found here.