Fines for exceeding emissions

ARVAL invited us to an event where emissions were the main focus. Together with industry professionals, we learned a great deal about the subject.

ARVAL pays close attention to everything surrounding emissions regulation and cares about the environment. We had the opportunity to attend one of its outstanding events, where the company showed us a lot of interesting data on the subject.

Arval’s new emissions guide

As a major leasing company, Arval works in tandem with all kinds of car brands. It knows first-hand, especially where manufacturers are concerned, how much the new emissions regulation can affect them.

For this reason, they presented us with a guide where we can learn the most important points about this sensitive issue which, although not very well known to the general public, carries outstanding significance within the sector.

Electric mobility is not as clean as we believed

It is true that electric cars, especially in Spain, tend to be idolised for their many advantages, particularly those related to saving money or accessing any area of the metropolis.

However, although an electric car makes its journeys without polluting, its production process, that is, its manufacture, is even more polluting than that of its combustion-engine counterparts. All of this is due to causes related to lithium batteries.

The emissions produced during the manufacturing stage of an electric car account for 51% of the total over its lifetime. On the other hand, while we charge our vehicle, that is, while using electrical energy, many emissions are also produced, specifically the remaining 49%.

Producing a petrol or diesel car generates less CO2 than producing an electric one. Of course, most of the emissions from fossil fuels occur when they are burned, that is, during driving.

In terms of emissions, all things considered, the electric car would be the one that emits the least, since over its lifetime in use it releases no emissions whatsoever. Diesel cars, for their part, generally account for 17%-21% of emissions within the sector, while their petrol counterparts generate between 26% and 30%.

We must bear in mind that it is estimated that by the year 2050, 50% of the world’s population will live in megacities, and 85% of global emissions will also be produced in these large urban areas, so raising public awareness of a more sustainable future is imperative. Arval knows this, and that is why it provides these useful data.

A tough regulation for manufacturers

The new regulations since 2014 only keep getting stricter, especially in Europe, where the targets are more ambitious and harder to reach. However, this is not surprising, since our continent leads in the amount of emissions released into the atmosphere, and it is Europe that must set the example.

Europe is followed by the USA, Australia and Asia, in last place, where the targets are more similar to those set by various world nations for Europe at the beginning of 2014, as can indeed be seen in the charts.

Fines are the main thing that frightens manufacturers, since if the targets are not met, the consequences could be extremely severe. There are also lucrative incentives that drive brands to reach record figures, but we will come back to that later.

Regarding fines, a penalty of €95 per gram will be applied for each gram of difference from the emissions target. That is, if the target is exceeded by 1 gram after one year of sales, and I have managed to sell 1 million cars during that same year, my fine would be €95 for each car sold, that is, a total of 95 million euros.

These figures are frightening, especially when we look at large manufacturers that sell many millions of vehicles a year; the penalties could reach such high amounts that they could account for the great majority of the net profits obtained during the year.

Combined, if the targets are not met, in Europe alone the fines during a single year could amount to 35 billion euros… Not a joke.

Of course, not everything is disadvantages; in fact there are great incentives. If a manufacturer manages to sell vehicles that emit less than 50 g/km, that is, 40 grams less than the target for the year 2020, the sale of that car will count as two sales, that is, DOUBLE PROFITS.

This means generating far more money for companies and betting on a future with genuinely far fewer emissions. This regulation, of course, and like any good “bargain” it is, will only be in force in the year 2020. Its benefits or advantages will gradually diminish with each passing year until they reach zero.

In short, ARVAL has shown us the present and future of emissions, and through its guide, which you can obtain by clicking here, we can get a clearer picture, as consumers, of what the coming years hold for companies and what we can expect ourselves.