France, Italy in push to scrap 2025 car emission fines

BRUSSELS: Several EU countries including France and Italy on Tuesday upped pressure on Brussels to ditch fines for embattled European carmakers that do not meet carbon emission reduction targets in 2025.

The issue was discussed at a meeting of European Union environment ministers in the Belgian capital, which came as the bloc's automotive industry is facing a deep crisis, according to diplomatic sources.

France's Minister for Ecological Transition Agnes Pannier-Runacher called for flexibility not to penalise European manufacturers in the face of international competition.

Hitting carmakers with fines would be "counterproductive" and weaken Europe's industry doing little to accelerate the transition towards electric vehicles, she argued.

The Czech Republic and Slovenia held similar views, diplomats said.

Among others, Italy, Poland, and Austria last month backed a paper warning penalties "would severely limit the ability of the industry to reinvest in innovation and development, thus harming Europe's competitiveness on the global stage".

The European Commissioner for climate, Wopke Hoekstra, told a press briefing after the meeting that the ideas and worries raised were "well heard" and would be discussed with other commissioners.

But he could not see "how either the industry or the climate will be helped by lowering" emission targets, he added, saying members of the industry had asked for predictability in terms of policy.

Europe's car industry has been plunged into crisis by high manufacturing costs, a stuttering switch to electric vehicles (EV) and increased competition in key market China.

EV sales have been slower than expected at a time when carmakers are contending with tougher EU rules on carbon emissions.

Layoffs have already been announced at a raft of auto giants and suppliers in Germany and elsewhere in the EU, from Volkswagen and Ford to Bosch, Valeo and Michelin.

The EU's 27 states reached a historic agreement on phasing out the sale of fossil fuel-burning cars by 2035, as part of ambitious efforts to combat climate change.

Car manufacturers must respect an annual average of emissions per car sold in Europe.

The standard, known as CAFE (Corporate Average Fuel Economy), requires them to gradually sell vehicles that are less and less polluting.

It has so far been generally respected, but tighter rules are to come into force in January.

In November EU chief Ursula von der Leyen promised to personally lead a new initiative to help the troubled car industry navigate the transition.