EU offers emission rule delay to spare carmakers from fines

BRUSSELS

EU chief Ursula von der Leyen has offered to give struggling European carmakers "breathing space" by allowing them extra time to meet 2025 emission reduction targets without facing fines.

The announcement is part of the bloc's push to protect the auto industry, which employs 13 million people and accounts for about seven percent of Europe's GDP.

"There's a clear demand for more flexibility on CO2 targets," Von der Leyenld told reporters in Brussels. "Instead of the annual compliance, companies will get three years."

She added companies would still have to "fulfil" the same targets.

"But it means more breathing space for industry. It means also more clarity," she said after talks on March 3 with industry representatives including from BMW, Renault, Volkswagen and Stellantis, which owns several brands including Jeep, Fiat and Peugeot

Starting this year the EU is lowering the average emissions that new vehicles sold in the 27-country bloc are permitted to produce, with carmakers facing steep fines if they fail to comply.

Carmakers had expressed concern that they would not be able to meet the target because of falling sales of electric vehicles in Europe and amid fierce Chinese competition.

The proposed changes will still need approval from EU states and the European Parliament.

The fines had faced criticism from Germany, Italy and France -- whose European affairs minister Benjamin Haddad welcomed the commission's move as "a common sense decision to safeguard our industrial sovereignty."

The European Automobile Manufacturers' Association (ACEA), an industry group, welcomed the proposal as "a first step in the right direction".