The CO₂ balance of Munich is better than necessary. Now they allow other manufacturers to offset their emissions against their own. This brings BMW financial advantages.
BMW i3: Many electric models, low emissions. Photo: BMW
BMW is allowing other manufacturers to offset their CO₂ emissions against their own from 2025 to 2027; applications are possible until the first of October next year.
Applicants must sign a confidentiality agreement and disclose their emissions. BMW also requires financial reports or bank guarantees so that they can cover possible fines.
BMW achieved the EU goals last year without a pool. According to ICCT, the group has the highest proportion of electric vehicles among European car manufacturers so far this year.
Pooling brings financial advantages to BMW in a difficult situation: the group issued its second profit warning in six months a week ago. He expects an EBIT margin of no more than 0.5 percent for the car division this year.
The summary was created and editorially checked using AI.
Dusseldorf. BMW enables other car companies to offset their emissions against those of the Munich car manufacturer. This emerges from documents from the European Commission.
Car manufacturers are allowed to jointly bill their own brands’ CO₂ emissions and those of their competitors using so-called “pooling”. This allows manufacturers to comply with EU limits that they would not have achieved on their own.
According to the documents, companies can apply to BMW retroactively for the period 2025 as well as for 2026 and 2027. The application must be received by BMW no later than the first of October of the next year. Competitors must sign a confidentiality agreement and disclose their CO₂ emissions. BMW wants to assess whether the shared pool is in danger of missing its goals.
If that is the case, companies must be able to bear the financial burden, such as penalties for excess emissions. That's why BMW requires financial reports or bank guarantees from its applicants.
Compared to the industry, the Munich-based company is better positioned than other manufacturers. Last year they already achieved the CO2 targets set by the EU without having to pool with another company. According to the International Council on Clean Transportation (ICCT), BMW is the European car manufacturer with the highest proportion of electric vehicles so far this year.
Pooling as a business model
With CO₂ pooling, manufacturers are not tied to their own group. The sports car manufacturer Porsche only separated from the VW Group pool in the summer and is planning a partnership with the Chinese electrical manufacturer Xpeng.
Rather, manufacturers can look for external partners and negotiate the conditions with them. According to EU regulations, open pools must be “transparent and economically appropriate”.
As a rule, a lot of money goes into saving the CO₂ balance in the automotive industry. If the emissions from new vehicles are on average above the EU limit, penalties will be incurred.
The move has financial advantages for BMW. Given the difficult economic situation, an additional source of income does no harm. The Munich-based company is in the middle of restructuring the company. Just last week, the company issued its second profit warning in just six months. In the important automotive industry, BMW says it will achieve a maximum EBIT margin of 0.5 percent this year. In the worst case, the core business is in the red.
» Read also: Three car manufacturers, four profit warnings: The electric wave is overwhelming VW, BMW and Mercedes
Even adjusted for the costs of the restructuring, the end result would only be a margin of just over two percent - far below our own expectations. The weak business in China in particular is depressing BMW profits.
Related topics
BMW European Union China Porsche Volvo
However, industry analyst Matthias Schmidt does not expect the move to have much of an impact. “It’s like BMW is looking for change to pay the bills – that’s how hard the hit in China is hitting the balance sheet.” But it's definitely worth the try. Because BMW is already exceeding the EU targets, it could look for a new partner.
According to Schmidt, Chinese companies are particularly suitable for this. Japanese manufacturers are already in a pool with Tesla, and rival Mercedes-Benz has teamed up with Swedish premium manufacturer Volvo. A partnership with the Chinese state-owned company SAIC would be possible. Its MG brand is one of the most popular Chinese brands in Europe and missed its targets last year.
More: Conflict at Mercedes escalates - but time is of the essence when it comes to finding solutions
Published according to the editorial standards of the Handelsblatt. You can find more information in our guidelines.
