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Ford Will Avoid European Fines Over CO2 Emissions With Carbon Credits

2020 but especially 2021 will be hard on the automotive industry because the European Union is waging war against CO2. The Blue Oval is expected to miss the fleet-wide average target of carbon-dioxide emissions this year, and as a result, Dearborn disclosed that it’s buying “carbon credits” to offset more polluting models.
Ford Kuga PHEV 29 photos
Photo: Ford
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“Ford has been forced to turn to rival carmakers to help it meet European emissions goals,” reports the Financial Times, and one of the reasons for this mess-up is the Kuga PHEV. No fewer than 27,000 units have been recalled in August 2020, and a stop-sale order has also been issued over a fire risk from overheating batteries.

To understand how much the Kuga PHEV matters to Ford of Europe, we have to gloss over the CO2 emissions of the compact crossover. 32 grams per kilometer is the WLTP rating, far lower than the carbon-dioxide emissions of green models like the Mondeo Hybrid or the Fiesta with the 1.0-liter EcoBoost mild-hybrid powerplant.

Under the new CO2 rules, Ford and other backmarkers like Daimler and Volkswagen are allowed to buy carbon credits from eco-friendly automakers to meet the emissions target for 2020. One helping hand should come from Toyota, which has the lowest average CO2 emissions for new passenger vehicles in this part of the world thanks to a hybrid-focused model lineup.

Tesla is another candidate. As a brief refresher, Elon Musk’s company helped Fiat Chrysler Automobiles in 2019 with carbon credits. To avoid CO2-related fines in Europe, FCA spent 120 million euros ($134 million) last year alone.

Renault and Volvo have also decided to pool their carbon credits, which means that Ford has four options at the very least to finish 2020 without being fined by the European Commission. The EC believes that cars are responsible for approximately 12 percent of CO2 emissions in the EU.

Come 2021, the fleet-wide target for new cars will be 95 grams per kilometer. If an automaker exceeds that figure, a penalty of 95 euros for each gram of exceedance will be applied for each car registered that year. In other words, it's very expensive to fail to comply with the new CO2 regulations.
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About the author: Mircea Panait
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After a 1:43 scale model of a Ferrari 250 GTO sparked Mircea's interest for cars when he was a kid, an early internship at Top Gear sealed his career path. He's most interested in muscle cars and American trucks, but he takes a passing interest in quirky kei cars as well.
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