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Volkswagen faces EU fine for missing emission targets

·Finance and policy reporter
·2-min read
A Volkswagen logo seen on a parked car in Krakow city center.  On Thursday, December 10, 2020, in Krakow, Poland. (Photo by Artur Widak/NurPhoto via Getty Images)
Volkswagen faces an EU fine. Photo: Artur Widak/NurPhoto via Getty

Volkswagen (VOW.DE) faces an EU fine after falling short of targets for cutting its cars’ CO2 emissions.

The German carmaker announced on Thursday it had slashed average emissions for its fleets across Europe by about 20% over the past year compared with 2019.

But it confirmed it had “narrowly” missed EU targets, exposing itself to a fine. The group had previously flagged it anticipated the shortfall, and had put aside an unconfirmed level of provisions that will “avoid any impact on fourth-quarter earnings.”

“We narrowly missed the fleet target for 2020, thwarted by the COVID-19 pandemic,” said Herbert Diess, CEO of the Volkswagen Group in a statement.

The average vehicle’s CO2 emissions have been brought down to 99.8 grams per kilometre, according to the company, just 0.5g short of the fleet target.

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“We are making good progress on the road to becoming a CO2-neutral company, added Diess. “The Volkswagen and Audi brands in particular have made a major contribution to achieving this with their e-offensive.”

The company said electric model production in the EU and Britain, Norway and Iceland had risen more than fourfold to 315,400 in 2020. Battery electric vehicles and hybrids rose to 9.7% of models, it said.

“The Volkswagen Group is thus the clear market leader in the all-electric segment in Western Europe,” it said, suggesting its vehicles made up around a quarter of the market.

The shadow of Volkswagen’s ‘dieselgate’ emissions scandal continues to hang over the company, costing it a reported $30bn (£22bn) in fines, provisions and vehicle refits, according to Reuters. It admitted in 2015 to using illegal software in diesel cars which allowed it to cheat emissions tests.

Volkswagen shares were up 0.3% in Germany after the news.

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