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Auto industry balks as EU agrees to 37.5% CO2 reduction target

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Auto industry balks as EU agrees to 37.5% CO2 reduction target

Cars in the European Union must emit 37.5% less CO2 by 2030 versus 2021 levels, EU lawmakers agreed Dec. 17, prompting a scathing response from auto manufacturers who described the goal as "totally unrealistic."

The move means average CO2 emissions from cars must fall by the end of the next decade to roughly half what they were in 2017, with an interim target of a 15% reduction by 2025. Vans will be subject to a lesser cut of 31%.

Lawmakers agreed on the percentage after months of negotiations within and between the European Parliament, Council of Ministers and European Commission, which had proposed cuts ranging between 30% and 40%.

The European Car Manufacturers' Association, or ACEA, which had called for a 20% cut, said it had "serious concerns" about the deal, which would require urgent technological change and huge spending on infrastructure.

"Delivering a 37.5% reduction might sound plausible, but is totally unrealistic based on where we stand today. Industry deplores that this 2030 target is driven purely by political motives, without taking technological and socio-economic realities into account," the ACEA said in a statement.

The ACEA called on policymakers to guarantee investments in recharging and refueling infrastructure and make plans to soften the socio-economic impact of structural change in the industry which a push toward electric cars will precipitate. Europe's automotive sector employs 13.3 million people, many of whom produce engines, gearboxes and other mechanical components that are not required in electric cars.

Analysts have voiced skepticism over the industry's stance, however, pointing to a long history of resisting but ultimately delivering on regulatory changes that have made today's cars safer and more efficient.

Brussels-based clean energy campaigning group Transport & Environment said the target would bring greener cars to market sooner but fell short of what is needed to meet European Union targets for mitigating climate change.

"Europe is shifting up a gear in the race to produce zero-emission cars. The new law means by 2030 around a third of new cars will be electric or hydrogen-powered. That's progress but it's not fast enough to hit our climate goals," Greg Archer, Transport & Environment's clean vehicles director, said in a statement.

The CO2 targets need to be met as a fleet average by each manufacturer, rather than applying to each individual model. Electric and hybrid cars will have an inflated weighting in the calculation of fleets' average emissions as an incentive for manufacturers to use more partially or fully electrified powertrains.

The targets must still be approved by the EU's two legislative bodies, the European Parliament and the Council of Ministers, in what is usually a formality. In the event that the legislation was derailed during the final steps, reintroducing it could be complicated by European parliamentary elections in May.

Automakers that miss the targets in 2025 and 2030 will be forced to pay penalties which lawmakers want distributed to car manufacturing towns and cities to fund public policies aimed at managing the social impact of the automotive sector's shrinking industrial footprint.

Ministers from EU member states will separately take up discussion of CO2 reduction targets for heavy goods vehicles on Dec. 20. The European Parliament in November called for a 35% cut by 2030 versus 2021 levels, while the ACEA is advocating a reduction of 16%.