CO2 pooling as a way out: car manufacturers join forces with ‘quota over-fulfilers’ like Tesla

The pools form a common settlement basis with which car manufacturers who are unable to meet the limit values this year due to their new car drive mix can avoid fines. At the same time, the electric car manufacturers who keep the average emissions in the pool down are well paid for the offsetting. For many manufacturers, pooling still looks to be the more favourable solution. In any case, an EU document shows that two such pools are currently being formed.

According to the document, Stellantis, Toyota, Ford, Mazda and Subaru want to have their CO2 fleet limits offset against those of Tesla. The German car manufacturer Mercedes-Benz is also endeavouring to form a pool with Smart, Volvo Cars and Polestar, the document continues. Additionally, the two pools are open for applications from other car manufacturers until the beginning of February.

This type of joint assessment is not a new phenomenon. The introduction of CO2 fleet limits in the EU in 2021 already led to such cross-company pools. As is well known, the limits set manufacturers a limit for the CO2 emissions of their fleet sold in the EU. To date, this value has been 115.1 grams of CO2 per kilometre per vehicle, falling to 93.6 grams in 2025 and 49.5 grams in 2030. The jump from 2024 to 2025 is relatively large, which has been causing unease in the car industry for months. In principle, the 2025 target can only be achieved with a certain proportion of electric cars, but their sales are not developing as expected. Those who fail to meet the limit values must expect high penalties. A lobby document circulating in the industry warned back in September that the CO2 limits could cost millions of jobs.

Large sections of politicians no longer want to touch the CO2 fleet limits for 2025, but also do not want to hit the car industry with penalties running into billions. A booking trick is therefore currently being discussed at the EU level to protect car manufacturers from climate penalties in 2025. This is less about offsetting ‘across the board’ (as with pooling), but rather on the vertical time axis. For example, a manufacturer should be able to offset possible deficits in 2025 by overfulfilling the quotas in 2026 and 2027. This was the specific proposal made by Germany’s Economics Minister Robert Habeck (Green Party). However, the position of creating a ‘pragmatic transition’ is also shared by German Chancellor Olaf Scholz (SPD) and the largest political group in the EU Parliament, the EPP.

But back to the looming manufacturer pools: Reuters quotes a Stellantis spokesperson as saying that participating in the pool with Tesla will help the group to achieve its EU targets for 2025 while optimising its resources. Stellantis wants to continue to drive forward the development of innovative electrical and low-emission technologies. A Mercedes spokesperson also stated in Der Spiegel that the reason for the decision [to pool] was the pace of transformation in the industry. The pool is intended to close the gap at Mercedes if not enough electric cars are sold.

For the companies that exceed the quotas, pooling is a lucrative side business. According to Der Spiegel, Volvo generated 0.3 per cent of its revenue from the sale of emission rights in the first nine months of last year. At Tesla, revenue from this area totalled more than two billion dollars (Q1 – Q3 2024).

The EU document does not mention the two German manufacturers BMW and Volkswagen. A Volkswagen spokesperson explained to Der Spiegel that the company’s aim is to achieve the targets primarily through its own efforts. If this does not succeed, there is still time until autumn to form a pool for the current year. BMW boss Oliver Zipse recently publicly stated that he was confident of meeting the targets.

circabc.europa.eu via spiegel.de (in German), reuters.com