CDP suggests more emissions penalties yet to come

A new report, analysing 15 of the world’s largest car manufacturers with a combined market cap of $846bn, has found that regulatory tightening on emissions in the wake of the Volkswagen scandal six months ago is having a significant business impact. The report, based on data from carbon disclosure organisation CDP, shows seven other manufacturers also potentially face up to $4.8b in penalties for non-compliance on their fleet emissions, with General Motors and Ford the companies noted as most at risk - their penalties could reportedly equate to a combined US and EU penalty of $1.8bn and $1.2bn respectively.

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That’s according to a new report from global carbon disclosure organisation CDP, which reveals that regulation changes to emission testing introduced over the past six months has put VW and seven other carmakers – including Hyundai and Tata Motors – at risk of penalties worth around $4.8bn.

The report ranks 15 automakers which represent around 90% of the global vehicle market on criteria such as fleet emissions, manufacturing emissions – which accounts for 20% of the industry’s total emissions – advanced vehicle rollouts and regulation support, before giving each company an individual grade.

Overall, Nissan, BMW, Renault and Toyota rank highest on CDP’s environment metrics, while VW, which received an A grade for the launch of five new advanced models last year, were unable to be given an overall grade due to withdrawing its response to CDP following that emissions scandal.

CDP’s chief executive Paul Simpson said: “It’s time for car makers to take climate change seriously. Six months on from the VW emissions scandal, today’s new investor research shows that too many companies still fall short in the light of stringent regulation and possible penalties on fleet emissions and that’s a significant risk for the sector as a whole.

“By performing well in areas such as advanced vehicles and supporting low carbon regulation manufacturers such as Nissan, Renault, BMW and Toyota are putting themselves in the fast lane for future growth.”

According to the report, both General Motors and Ford are at ‘notable risk’ of incurring emissions penalties in both the UK and the US, which could end up costing the companies a combined $1.8bn. BMW, Hyundai, Daimler and Honda are all at risk of penalties in these regions, while FCA is facing penalties totalling $573m.

Top of the class

At the other end of the spectrum, Nissan and Renault continue to accelerate and innovate in the market, according to CDP. The report reveals that these companies are catalysing the Paris Agreement to gain a ‘competitive advantage’ in the sector.

Not only are these companies actively supporting new regulations – such as the ‘stringent’ emission test in China which could put five million electric vehicles (EV) on the roads by 2020 – but they are using the electric vehicle boon to boost sales.

Nissan’s growth in the EV market has seen the carmaker move on from electrifying its portfolio to using the cars as innovative energy storage hubs – a move that has been mirrored by Renault which is recovering from false fraud claims.

The growth of electric vehicles offers up a positive future for carmakers that embrace the transition. By 2040 it is estimated that EVs will account for 35% of all car sales, with electrified models fast becoming households’ primary vehicles.

Emission impossible

Greening your fleet at edie Live 2016

Whether from logistics and operational vehicles or company cars, fleet emissions can contribute significantly to an organisation’s carbon footprint. From driver management to electric vehicles, the edie Live 2016 exhibition at the NEC Birmingham in May will address the approaches and options available to reduce impact, cut carbon and green your fleet.

Find out more about edie Live 2016 and register to attend for free here.

Matt Mace