Vehicle emission penalties

Emission penalties, also known as carbon tax, are part of the Environmental Tax Reform (ETR). The aim of this reform is to tax everything that is generally considered harmful to the environment. It is therefore a highly non-exact and political issue. Moreover, these penalties are very difficult to enforce internationally.

As of January 1, 2020, the European Union introduced regulations that, in simple terms, mandate that all cars produced by a given automaker can emit, on average, 95 grams of CO2 per kilometer. For each gram exceeding this limit, the automaker/customer faces a fine. This regulation is unrelated to the EURO emission standard or the homologation emission regulation; it is a fine imposed by the European Union.

As explained in detail in this article, the production of carbon dioxide depends directly on the quantity and type of consumed fuel. Emission fines are determined based on the average emissions of the total production program of a given automaker or a group of automakers. This means that the so-called fleet consumption of manufactured vehicles is important. Simply put, the average consumption of all sold diesel cars must not exceed approximately 3.6 liters of diesel per 100 km, and for petrol cars, it must not exceed 4.1 liters of petrol per 100 kilometers drivensource.


Determining the actual emission penalty is a bit more complex:

A/ The 95 g/km limit is not fixed; it depends on the kerb weight of manufactured vehicles. The emission limit of 95 g/km applies to vehicles whose kerb weight corresponds to the EU fleet average. The EU determines the average kerb weight for each year in advance; for example, for 2021, the official average weight of the vehicle fleet was set at 1380 kg. The basic limit of 95 g/km CO2 is then reduced or increased based on the specific vehicle’s weight.

For every saved 100 kg in the vehicle’s weight, the emission limit is reduced by an additional 3.33 g/km. Conversely, heavier vehicles have their limit increased by 3.33 g/km for every 100 kg of weight. This complex solution aims to support market diversity and prevent discrimination regarding the different uses of vehicles. It’s challenging for a seven-seater family vehicle to weigh the same as a city mini car. As a result, lightweight vehicles will have even stricter limits, while heavy vehicles will be able to emit more carbon dioxide “without penalty.” However, the ratio is entirely in the hands of officials!

B/ Another factor influencing the resulting allowed emission limit is something called Super Credit. It’s another way to incentivize manufacturers to introduce cars with low or zero emissions. From 2020 to 2022, bonuses will be granted for vehicles emitting less than 50 g CO2 per kilometer. These low-emission vehicles will be counted twice for penalty calculation (2020), then 1.67 times (2021), and subsequently 1.33 times (2022) – source

… all of this artificially supports the production of electric vehicles. Battery Electric Vehicles (BEV) are heavy, carrying 300 to 800 kg of batteries, and the emissions from their production are not considered, see the article on electric vehicle emissions.

How large is the emission fine for CO2 production?
The emission penalty for each gram of
CO2 above the limit is €95source

Calculation of the specific vehicle emission limit:

Calculation of the emission fine for a specific vehicle:

If a Skoda Fabia with a 1.0 TSI/70 kW engine weighs 1111 kg, it will have an emission limit lower by 9 g/km based on its weight, i.e., 86 g/km. However, the catalog emissions of this engine are 103 g/km, meaning 17 g/km higher, resulting in a final emission fine of €1615.

Automakers, or their customers, will pay astronomical EU fines
According to JATO, the cumulative emission fine in 2021 will be around €34 billionsource. This implies that, even for such enormous sums, automakers are unable to develop technology that complies with the limits and prefer to pay the fine. The question remains whether the limits are intentionally set to be unattainable, funding the EU’s social policy through enormous fines.

Further reduction of CO2 limits
The European Union plans to continue its controversial actions by lowering the CO2 emission limit to 65 g/km starting in 2030.
So, if there is still a European car industry at that time, its products will achieve a fantastically low average consumption of 2.2 litres of diesel per 100 km, or 2.5 litres of petrol per 100 km – source.

Did you know…

  • Behind it all is a major technical flaw in the regulations. It is very difficult to ask automakers to approach the problem of emission penalties through the blind electrification of their models. The highly promoted battery-electric vehicle (BEV) cannot, from a technical perspective, be considered an emission-free means of transport in any case! We will not delve into the carbon footprint of production or the efficiency of individual systems now. It is important to realize that the consumed electric energy does not spontaneously appear in the electrical plug socket. It needs to be produced! The actual emission footprint of electric vehicles is not zero, but current legislation pretends that it is! Automakers do not want to invest astronomical amounts and immense effort (development, production, infrastructure) into something that can be overturned by a single official decision!
  • Emission fines and the sale of emission allowances are now a huge business, see EU Emissions Trading System (EU ETS). Companies like Tesla derive a significant income from this, which effectively keeps them afloat.