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Report: Europe’s CO2 Targets Could Cut Profits by $8.3 Billion
The costs of meeting carbon dioxide emission standards in Europe in 2021 could cost the region’s largest carmakers a combined €7.4 billion ($8.3 billion).
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The costs of meeting carbon dioxide emission standards in Europe in 2021 could cost the region’s largest carmakers a combined €7.4 billion ($8.3 billion), the Financial Times reports.
FT cites an analysis by Swiss investment bank UBS Group that says reaching the EU’s mandated CO2 limit of 95 g/km two years from now will slash earnings per share 25% at PSA, 20% at Fiat Chrysler Automobiles, 13% at Volkswagen Group and 10% at Renault.
The report figures PSA would be hardest hit because it derives such a high proportion of its total sales from Europe. UBS also notes that failing to meet the EU’s 95-gram target carries a fine of €95 ($107) per gram excess emissions, multiplied by the number of noncompliant vehicles sold in the EU.
UBS points out that Europe’s carmakers are struggling to meet the current fleet average CO2 emission limit of 130 g/km. The EU is moving toward standards that would lower the 2021 limit of 95 g/km another 15% by 2025 and 30% by 2030.
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