Scholz Opposes EU Fines for Carmakers Missing CO2 Emission Limits

German Chancellor Olaf Scholz has voiced opposition to the European Union's proposal to impose fines on carmakers who fail to meet CO2 emission targets. Scholz expressed concerns that such penalties could negatively impact the automotive industry, particularly during a time when companies are transitioning toward greener technologies. His stance reflects broader debates within the EU over how to balance environmental goals with economic and industrial interests.

German Chancellor Olaf Scholz stated on Monday that car manufacturers in the European Union should not face fines for failing to meet carbon emission limits.

He emphasized that companies should retain the funds for modernizing their own operations and industries, rather than paying penalties.

Earlier in the day, Economy Minister Robert Habeck expressed openness to temporarily suspending fines scheduled for next year if carmakers can compensate for missed CO2 targets by surpassing their goals in 2026 and 2027.

Habeck also outlined his position on fleet limits, stating that Germany is committed to the fleet limits but will take a pragmatic approach to the transition. This, he explained, would offer companies flexibility and encourage further progress in climate protection without burdening them with billions in fines.

EU regulations require that the average emissions of newly registered cars in 2025 be 15% lower than in 2021, but a decline in electric vehicle sales has made it more challenging to meet this target. Hildegard Mueller, head of Germany's carmakers lobby (VDA), pointed out a disconnect between the ambitious CO2 fleet goals and the necessary political support and incentives.

She noted that weak demand for electric vehicles and ongoing economic difficulties were hampering progress, despite the industry’s substantial €410 billion investment in research and factory upgrades by 2028. Mueller argued that in light of the economic challenges, the lack of electric vehicle demand, and inadequate framework conditions, further burdens from potential fines in 2025 must be avoided.

Germany's environment ministry reaffirmed its commitment to EU fleet limits and climate goals but suggested a flexible approach to the timing of fine payments as a potential solution, given the current difficulties in the automotive sector. A ministry spokesperson warned that failing to offer such flexibility would undermine the industry's planning security and disadvantage manufacturers who are meeting the targets.

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Source: Reuters‍