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Volkswagen sets up carbon dioxide emissions "pool" SAIC and Ford will join
Sep 21,2020 14:54CST
The content below was translated by Tencent automatically for reference.

SMM: starting from 2021, the average carbon dioxide emissions of European automakers' fleets need to be reduced from 121.8 grams per kilometer to 95 grams per kilometer, and automakers that fail to meet the standards will face EU fines.

However, there are policies and countermeasures. According to foreign media reports, a document from the European Commission shows that Volkswagen will form a carbon dioxide emissions "pool" with its Chinese partner SAIC and its subsidiary Mingjue Motor (CO2 pool), will share carbon dioxide emissions) until 2022.

Volkswagen is worried that it may not be able to meet EU carbon dioxide emissions standards this year and in 2021. Volkswagen just started delivering its ID.3 all-electric compact car last week; on Sept. 23, it will unveil its electric crossover ID.4, which is not expected to be delivered to customers until the end of the year. With SAIC, Volkswagen will benefit from strong demand for Mingjue's zero-emission small all-electric SUV ZS EV, which is currently sold in markets such as the UK, Norway and France. Mingjue also plans to launch a second electric car this month: the compact station wagon MG5. In the first seven months of this year, Mingjue electric cars accounted for 1/10 of Volkswagen's total sales of pure electric vehicles in Western Europe (59000).

In addition, Brexit is imminent. The UK may retain the EU's emissions targets, but will allow internal trading. Most of Volkswagen's sales in the UK come from the Bentley brand, which means that most carbon dioxide-intensive cars are sold. By contrast, the ZS EV is the fourth most registered all-electric model in the UK, according to the August European Electric vehicle report, and partnering with Mingjue will also help Volkswagen meet carbon dioxide emissions standards in the UK.

A spokesman for the Volkswagen Group said, "this is an additional safeguard in the event that the epidemic leads to continued instability in the market." It added that the "pool" of carbon dioxide emissions might be open to other carmakers in the future.

According to another report, a Ford spokesman revealed that the company may cooperate with Volkswagen Group to share carbon dioxide emissions in the field of light commercial vehicles. Although the amount of VW's deal with SAIC and Ford has not been disclosed, it partly suggests that Volkswagen does need outside help to meet its carbon dioxide emissions targets.

Sharing carbon dioxide emissions among car companies is a controversial way to avoid fines, given the EU's increasingly stringent carbon dioxide emissions regulations. In essence, the approach weakens (ETS), the EU's emissions trading mechanism, which allows car companies to join the carbon dioxide "pool" and share carbon dioxide emissions in order to comply with EU rules without paying fines.

Last year, Fiat Chrysler (FCA) reached a similar agreement with Tesla after it agreed to pay Tesla 1.8 billion EUR, to include Tesla's electric car in its fleet to avoid huge fines for violating the EU's strict new emissions regulations because of the low sales of FCA electric cars and the difficulty of offsetting carbon dioxide emissions from fuel vehicles. In general, the amount of carbon dioxide emissions traded between carmakers is lower than the potential fine.

As all carbon dioxide emissions "pools" in Europe must be announced by the end of the year, more car companies are expected to announce cooperation in sharing carbon dioxide emissions in the coming weeks or months.

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