European Commission President Ursula von der Leyen has announced a softening of environmental requirements for European carmakers. According to her, companies will be given a three-year period to meet CO2 emissions targets that were initially set for 2025, Bloomberg reports.
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Flexibility in achieving goals: postponement to 2027
Von der Leyen said a corresponding amendment to the rules, which would give the auto sector more flexibility, would be proposed as early as this month. In effect, this would mean that carmakers could miss their emissions targets in 2025, provided they make up for it by overachieving in 2026 and 2027.
Market reaction: carmakers' shares rise
Shares in leading European automakers such as Volkswagen AG, Mercedes-Benz Group AG and Renault SA posted strong gains following von der Leyen's remarks. The Stoxx 600 Automobiles & Parts Index, which tracks the auto industry, rose nearly 3% in trading.
Pressure from automakers and a decline in electric vehicle sales
European carmakers have lobbied hard for changes to the 2025 targets, as a slump in electric vehicle sales last year has made it difficult to meet the targets and left companies facing multi-billion-dollar fines.
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