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Italian industry head calls to delay full EU CO2 implementation

23 March 2020 Tim Urquhart, B.A.

(Excerpt)

The head of UNRAE, the Italian foreign automakers association operating in Italy, has said the European Union (EU) should reassess implementing its plan for stricter emissions targets as a response to the coronavirus disease 2019 (COVID-19) virus outbreak, according to an Automotive News Europe (ANE) report. With Northern Italy both the base for the Italian automotive industry and the epicentre of Europe's COVID-19 virus outbreak, it appears it will be some time before production and sales activity in the region returns to any kind of normality. Therefore UNRAE's president, Michele Crisci, backs the EU holding off its more stringent implementation of the 95g/km CO2 fleet emissions average for 2021 in order to lower the short-term cost burden on Italy's carmakers. He said, "A significant part of the components needed for electrified cars come from China. It is not clear yet how long this supply chain will take to resume its normal production flow. Automakers made plans to be compliant with these new, stricter CO2 targets, effective this year. But what about if we miss crucial components from China that are needed to build electrified cars?." Asked what the response should be, he said, "Move the 2020 CO2 targets to 2021. Due to the coronavirus, 2020 is going to be a very delicate and complicated year for automakers. Adding huge fines on an industry already under enormous pressure on the cost and margin sides would not help."

Significance: Given the massive implications for the global economy from the COVID-19 virus outbreak, of which the automotive industry is just one part, it might be wise for the EU to follow the course of action being suggested by Crisci. That said it would still face opposition from the green lobby in the European parliament and by other pressure groups. If it wants to ask for this delay the manufacturers will need to agree to implement a concerted lobbying effort through their membership of ACEA, putting a major emphasis on the threat to jobs and livelihoods that the outbreak represents and that adding further cost burdens to the carmakers at this time would be highly undesirable.

Posted 23 March 2020 by Tim Urquhart, B.A., Principal Analyst, Automotive, IHS Markit


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