Volkswagen faces EU fine for missing 2020 emissions targets By Reuters

© Reuters. The logo of German carmaker Volkswagen is seen on a rim cap in a showroom of a Volkswagen car dealer in Brussels

BERLIN (Reuters) – Volkswagen (DE:) faces a fine of more than 100 million euros ($121 million) for missing EU targets on carbon dioxide (CO2) emissions from its 2020 passenger car fleet, the world’s largest carmaker said on Thursday.

It cut average CO2 emissions in the fleet in the European Union by around 20% to 99.8 g/km, but that was around 0.5 g/km above its target, Volkswagen said.

That implied EU fines amounting to a “very low triple-digit million amount,” a spokesman said.

Concerned about global warming, as well as air pollution, European policymakers have clamped down on exhaust emissions, forcing carmakers to spur development of low-emission technology or face a penalty of 95 euros per gram of excess CO2 they emit.

“We narrowly missed the fleet target for 2020, thwarted by the COVID-19 pandemic,” CEO Herbert Diess said in a statement, adding he hoped to meet the target this year as the company’s main brands bring out new electric models.

The group said it had already made provisions for the fines to avoid a hit to its fourth-quarter earnings.

German rivals Daimler (OTC:) and BMW have said that they had achieved their CO2 goals following a rise in sales of electric models.

Volkswagen said deliveries of electric models in the EU, plus Britain, Iceland and Norway, more than quadrupled in 2020 to 315,400 vehicles, making the group the clear market leader with about a quarter of the all-electric market in western Europe.

The company said its core Volkswagen and Audi brands more than fulfilled their CO2 fleet targets due to the launch of popular electric models, with more on the way. Its Cupra sports car and Skoda brands will also present new electric models.

VW was helped closer to its target by a pooling system that allows carmakers above their limit to pay competitors who are below.

Volkswagen is reducing the number combustion-engined cars it offers and retooling more factories to build electric vehicles to try to keep up with electric carmaker Tesla (NASDAQ:).

It has said the EU’s more stringent emissions targets will force it to boost the proportion of hybrid and electric vehicles in its European car sales to 60% by 2030, up from a previous target of 40%.

Volkswagen admitted in 2015 to cheating emissions tests on diesel engines, a scandal that has cost it more than 30 billion euros in regulatory fines and vehicle refits, mostly in the United States.

($1 = 0.8237 euros)

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