The leaders of auto manufacturing hubs Germany, Italy and the Czech Republic on Thursday pressured Brussels to waive financial penalties on carmakers that miss EU emissions targets effective from next year.
Speaking ahead of a summit of European Union countries' leaders, German Chancellor Olaf Scholz said it did not make sense to add to the difficulties the industry faces.
"The Commission should therefore find a way to ensure that the fines, if they become necessary, do not affect the financial liquidity of companies that now need to invest in electromobility," Scholz told reporters.
Scholz, who is under pressure from an upcoming snap election in February next year, said he would discuss the state of Europe's auto industry with European Commission President Ursula von der Leyen on Thursday.
The prime ministers of Italy and the Czech Republic will also use Thursday's meeting to urge von der Leyen to drop fines on automakers that miss CO2 targets, EU diplomats said, speaking on condition of anonymity.
European carmakers could face some 15 billion euros ($15.62 billion) in penalties for missing the targets, according to industry estimates, with the region's biggest automaker Volkswagen (VOWG_p.DE) the most affected.
Automakers have warned of plant closures and thousands of job losses, as they struggle with weak demand, Chinese competition and lower than expected electric vehicle sales.
France also joined the opposition to fines this week. A government paper, seen by Reuters, said Paris did not want to weaken the CO2 targets, but supported a solution to avoid penalties on carmakers next year.
"The reality we are facing now is not the one we prepared for to begin with," Agnes Pannier-Runacher, French climate minister, said at a meeting of EU ministers on Tuesday where the paper was discussed.
The EU's 2025 targets set a CO2 limit that manufacturers must meet on average across the fleet of cars they sell during the year. A drop in EV sales could drive up a manufacturer's average fleet emissions, causing it to miss the CO2 goal.
Austria, Bulgaria, Romania and Slovakia have also urged the EU to rethink its CO2-cutting policies for cars. Only a few countries - including Sweden, home to Volvo (VOLCARb.ST) - have spoken out in favour of keeping the fines.
The European Commission said in a statement it would launch a "strategic dialogue" with the automotive sector in January, "with a view to swiftly proposing and implementing measures the sector urgently needs".
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