Brussels – European car manufacturers are navigating stringent CO2 emissions targets set to come into effect in 2025 by forming strategic alliances known as 'pools'.

This approach allows them to be treated as a single entity for compliance purposes, thereby mitigating potential penalties.

The European Union has set forth regulations that demand a 15 percent reduction in average CO2 emissions from both new passenger cars and light commercial vehicles, benchmarked against 2021 levels.

Non-compliance entails fines of 95 euros per gram of excess CO2 per vehicle sold.

The EU's regulation provides the possibility for companies to form pools, enabling manufacturers to collectively meet emissions targets.

Major automakers such as Tesla and Mercedes-Benz have led initiatives to create these pools.

Tesla's group includes 16 manufacturers, among them Toyota Motor Europe, Ford Werke, Stellantis Auto, Subaru Corporation, and others.

This pool remains open to new entries until February 5, 2025. Conversely, Mercedes-Benz's pool, which includes Volvo Car Corporation and Polestar Performance, among others, allows for entrants until February 7, 2025. These pools must be officially validated by December 31, 2025.

European Commissioner for Climate, Wopke Hoekstra, addressed the challenge posed by these regulations in a recent statement, noting that while some manufacturers have expressed concerns over meeting the 2025 targets, others remain confident and oppose altering the framework.

Hoekstra highlighted that changes to the regulations could disrupt market competition, disadvantaging manufacturers prepared to meet the existing standards.

This development comes as automakers face growing pressure to transition to eco-friendly vehicle production while balancing competitive dynamics across the European market.