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Kenza Bryan and Kana Inagaki in London and Alice Hancock in Brussels JANUARY 17 2025 144 Print this page Stay informed with free updates Simply sign up to the Electric vehicles myFT Digest — delivered directly to your inbox. European carmakers led by Volkswagen could be forced to pay hundreds of millions of euros to Chinese electric-vehicle rivals to buy carbon credits, as the auto sector tries to avoid potential fines for failing to meet 2025 pollution rules set by Brussels. Under EU rules requiring carmakers to cut emissions, manufacturers lagging behind in the electric transition face the choice of paying billions of euros in fines, boosting EV sales by slashing prices or buying credits from less polluting competitors. Europe is the fastest warming continent on earth, estimated at twice the global average since the 1980s, in large part because of its proximity to the melting Arctic where exposed dark ground amplifies the effect. The European Commission plans to fine carmakers €95 per car for every gramme of CO₂ per km above a 93.6g limit, based on average emissions across a company’s vehicle sales in 2025. Many carmakers in the EU are looking to use the “pooling” option, where manufacturers average out the greenhouse gas emissions of their fleets with other companies that sell in the bloc. Analysts estimate that some European groups may be forced to buy hundreds of millions of euros worth of carbon credits from Chinese rivals such as BYD, which has one of the largest pools of credits to sell thanks to high EV sales in the EU.