How automakers plan to avoid CO2 fines in Europe

For Europe’s automakers, a great leap into the unknown began on New Year’s Day, when European Union emissions standards that require a fleet average of 95 grams per kilometer of CO2 took effect. The numbers are stark. According to the EU, fleet emissions in 2018 were 120g/km, which means automakers need a 21 percent reduction overall to avoid fines that could total as much as 33 billion euros this year, according to some estimates. Each gram over the limit, per vehicle, will cost automakers 95 euros.

Each automaker has a different target, based on the average mass of the vehicles they sell, and only 95 percent of sales are measured in 2020, meaning that some high-polluting cars won’t count. Even so, analyst ISI Evercore has warned that the “2020-21 CO2 regulation poses the biggest risk to the auto industry in recent memory.”