Impact of EU emissions cut target on Czech carmakers ‘mitigated’ by incentives

EU lawmakers have hammered out a deal to cut vehicle emissions 35 percent by 2030 in a bid to fight climate change and pollution. The Czech Republic, whose auto industry is the main economic driver, was among those pushing for a far smaller cut, arguing stringent CO2 targets will lead to structural problems across the EU.

Photo: Filip Jandourek / Czech Radio

Germany, the EU’s largest economy, had long insisted on at most a 30 percent cut in emissions. But in the eleventh hour it relented after winning a concession to carry out an interim review of the new rules.

Other big car-producing nations, including the Visegrad Four – the Czech Republic, Hungary, Poland and Slovakia – reluctantly followed suit, while warning that, paradoxically, the cut will lead to a rush to buy cheaper polluting cars before standards change.

Deputy Minister of the Environment Vladislav Smrž says that while the Visegrad Four had hoped for a lower cut, lawmakers agreed to review the actual situation in 2023 – and to an incentive offsetting the cost of electric cars.

“The majority of countries were pushing for far more ambitious targets. For certain groups and individual member states, it was the best solution that could be expected. Within the negotiations, there was a real threat of a much bigger cut. It could have been 40 percent or more. Also, a text was agreed that should result in a much better situation for this country in ecological terms, which will help get more electric cars on Czech motorways.”

Mr Smrž is referring to a specific incentive for manufacturers to sell zero- and low-emission cars in markets – such as the Czech Republic – where the current sale of such vehicles is below 60 percent of the EU average.

Otherwise, most consumers in the region could not afford to buy electric and hybrid cars. Paradoxically, the cost of development, reflected in the final price, could result in the far slower promotion of electric vehicles.

Photo: Michal Malý / Czech Radio

Petr Karásek, crisis manager for the Czech Automobile Industry Association, is among those who argue that the costs and benefits of promoting electric car production have not been properly weighed.

"It seems to me that the EU legislation has been more influenced by ideology than by any real need. Nor has the interest of consumers in buying electric car been assessed – and they will compare the benefits, costs and risks associated with them."

Within 20 years, most new cars sold in Europe could be electric or hybrid. Meanwhile, despite the incentive, carmakers will have to sell such models at a lower profit margin, industry analysts say, and budget consumers will scramble to buy cheaper traditional combustion engine models while they still can.