Facing Emission Fines, Ford Becomes Ravenous for Carbon Credits

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Image: Ford Motor Co.

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Ford is joining the lengthening list of automakers that cannot adhere to European emissions mandates this year and is pursuing the popular option of simply buying carbon credits from rivals who managed to sell more than a few electrified vehicles.

Under the EU rules, manufacturers can “earn” carbon credits by selling more EVs. But legacy automakers were hamstrung all year by the pandemic and Ford is on the hook for a recall of its Kuga (Escape) PHEV. The Blue Oval recalled almost 21,000 examples of the plug-in hybrid in August, asking owners not to drive the crossover in its electric-only mode and to avoid charging the battery. While alarming in its own right, Ford said the recall effectively makes it impossible for it to meet 2020 EU emission quotas. It is now seeking partners for an “open emissions pool” and is hardly the only manufacturer doing this.

Fiat Chrysler Automobiles has basically informed the world that it’s just going to keep throwing money at the problem for as long as possible. It pooled with Tesla last year in order to reach its goals but has previously said it would just eat the fines if necessary. FCA hasn’t prioritized electrification and has several brands specializing in larger automobiles with big engines targeting the American market.

Daimler and Volkswagen Group aren’t on track to meet this year’s targets either. While Daimler chairman Ola Källenius the company was within striking distance of getting its fleet-wide emissions average down to just to 95g of CO2 per kilometer (this year’s limit in the EU), he hasn’t explicitly said the company would meet that goal by the end of 2020.

Meanwhile, Volkswagen has already pooled credits with its Chinese joint venture partner SAIC. Considering VW has made some of the loudest proclamations about becoming a greener company committed to electrification since 2015, it’s more than a little ironic to see it struggle with emissions quotas.

According to the Financial Times and Automotive News, Ford intends to form an open pool for light commercial vehicles because it’s on track to be well below its CO2 target for vans. As a collaborating partner in Ford’s EV and van programs, Volkswagen has already signed itself on to take advantage. That leaves the Detroit-based automaker hunting for dance partners dangerously close to midnight and bragging about how well it scored with its light commercial fleet.

“Based on our product road map and production schedule for this year, we expected to comply with the new regulations even factoring in Covid-related disruption to our manufacturing,” Ford said in a statement. “Therefore, just as many other carmakers have done in Europe, we now intend to join an open pool with other carmakers for passenger vehicles.”

Next year will probably be a repeat of this one. Europe saw a rush on automakers pushing EVs and hybrid models in 2020. Ford even ramped up its marketing budget to sell more Kuga PHEVs in a bid to adhere to increasingly stringent EU emission rules before they were recalled. The rules don’t get any easier next year but regulators seem convinced that the market share of plug-in models will rise to 15 percent (in Europe) in 2021.

[Image: Ford]

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