Volvo, Ford to pool CO2 output to escape EU penalties

Volvo and its spin-off sibling Polestar have announced that they will reduce fleet emissions beyond their CO2 target for 2020 (the parameters of which have been defined by the European Commission). The companies will also enter into a pooling arrangement with Ford, and potentially with other interested carmakers as well.

According to Autocar, current European Commission regulations stipulate that each manufacturer has to hit a set average fleet CO2 target, with those targets becoming increasingly stringent in the next few years. The EU rules allow for manufacturers to form ‘pools’ to combine their fleets emissions, thus avoid hefty fines.

Ford has already reached an agreement with Volvo (a company which it previously owned before selling to Geely), but the financial terms have yet to be disclosed. Volvo boss Håkan Samuelsson said the revenue from the deal with Ford will be invested in new projects to further develop its ‘green’ technologies. He said: “I am pleased to see that we are exceeding our CO2 reduction targets. It proves our strategy is the right one for our business and for the planet.”

Volvo Cars was the first automaker to commit to all-out electrification, and is currently the only brand to offer a plug-in hybrid variant for every model in its line-up. The next step for Volvo is to introduce a range of full electric vehicles, starting with the highly anticipated XC40 Recharge.

In a statement, Volvo said its plug-in hybrid sales in Europe amounted to more than a quarter of its total sales in the first nine months of 2020. That puts it firmly as the top premium European PHEV brand as measured by the IHS. By 2025, Volvo aims for 50% of its global sales to be full electric cars, with the rest being hybrids.

The grand goal is for Volvo Cars to be a climate-neutral company by 2040. Besides cutting tailpipe emissions, it will also reduce emissions along the manufacturing chain and other operations, as well as recycling and and reuse of materials.

Meanwhile, the Volkswagen Group has reached an agreement with Chinese automaker SAIC for its European operations (which include MG) to join its EU emissions pool. The agreement will help VW meet its targets during the roll-out of new electric models, such as the ID.3. Fiat Chrysler Automobiles has also entered into an agreement with Tesla to meet CO2 targets, while the Renault Group is also seeking partners for an open pool.

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