The Chinese electric vehicle giant BYD is negotiating with European manufacturers for the sale of carbon credits to help rivals avoid heavy fines from the European Union.
It’s important to remember that both in Europe and the United States, car brands are required to ensure that their ranges meet an average CO2 emissions value. If this value is not met, manufacturers can incur fines amounting to hundreds of millions of euros.
To address this issue, there are two possible options: either brands focus on reducing the average emissions of their range or they opt for the quicker and “cheaper” solution by purchasing carbon credits from brands that do not need them, such as BYD.
“We are in negotiations, we are making good progress”, said BYD’s special consultant for Europe, Alfredo Altavilla, in statements to “Reuters” during the presentation of the Atto 2 in Italy.
It should be noted that earlier this year, two groups, also referred to as “pools,” of car manufacturers willing to buy carbon credits from electric brands emerged. One group includes Stellantis, Toyota, Ford, Mazda, Subaru, and Tesla, while the other consists of Mercedes-Benz, Polestar, Volvo, and Smart.
So far, BMW, the VW Group, and the Renault Group are the only major European manufacturers that have not yet joined these carbon credit purchasing groups.
The EU’s CO2 emission targets for 2025 are about 15% lower than the levels of 2021, and experts say that car manufacturers will need to have at least 20% of their vehicles be 100% electric in order to meet the proposed targets, at a time when the electric vehicle market has stagnated in Europe.
