Mazda's success in selling SUVs has left the automaker at risk of heavy fines for missing European CO2 reduction targets.
Last year, Mazda pooled its CO2 emissions in Europe with Toyota's to avoid a fine for missing an EU mandated reduction target.
The automaker declined to comment on whether it would pool with Toyota this year to lower its fleet emissions.
The success of the CX-5 SUV is pushing up the automaker's average emissions in Europe, CEO Akira Marumoto said. SUVs have higher emissions than Mazda's traditional core models, the Mazda3 and Mazda2.
Sales of CX-5 and the smaller CX-3 accounted for more than half of Mazda's European 228,210 vehicle sales last year, according to JATO Dynamics. CX-5 sales rose by 17 percent to 69,196 and CX-3 sales increased 4 percent to 55,192.
Mazda is also adding another SUV, the CX-30, in September in Europe.
Mazda will not reach its EU mandated target to cut its average fleet emissions to 94.1 grams per km in 2021, a report by PA Consulting said.
Mazda's emissions will fall to 98.1 g/km in 2021 from 131.2 g/km today, leaving the automaker at risk of a 75 million euros EU penalty, the company said.
To meet future CO2 reduction goals, Mazda will count on emissions-reducing technologies such as its new Skyactiv-X gasoline engine with spark-controlled compression ignition, as well as plug-in hybrids and an upcoming full-electric car.
The recently launched Mazda3 will be the first model to get the Skyactiv-X engine, followed by the CX-30.
The engine has CO2 emissions of less than 100 g/km, Marumoto said.
Mazda will launch a full-electric car in Europe next year, using its own technology. The EV will allow the automaker to reduce its CO2 average because it will have zero emissions and it will allow Mazda to claim so-called "supercredits" for vehicles with emissions below 50 g/km.
Marumoto declined to give any details of the model except to say it will have a design different from the typical EVs currently on the market. Motoring press reports say it will likely have a crossover design.
After 2022, Mazda is expected to launch EVs with technology developed by a joint venture it is joining with Toyota and Denso.
Starting in 2021, Mazda will offer plug-in hybrid models, but it has not given any more information about these cars.
Mazda will face a big hurdle next year when its emissions-reducing technologies will have only a partial impact on reducing CO2 while at the same time the EU expects automakers to have 95 percent of their vehicles compliant with their mandated target by 2020 with full compliance required by 2021.
The EU has set an industrywide target for average CO2 emissions from new cars to be cut to 95 g/km but each automaker has an individual weight-based target and they are allowed to pool emissions. The EU fines are 95 euros for every gram over the target, multiplied by the number of vehicles sold.
Toyota will easily meet its CO2 target of 95.1 g/km in 2021 because 72 percent of its new-cars are hybrids, PA Consulting said. Toyota's emissions will drop to 87.1 g/km in 2021 from 103 g/km today, the company predicted.
Marumoto said Mazda will have "some difficulties" in reaching its EU mandated target for 2020 and might have to pay the EU fines.
The automaker would rather pay the fines than curtail its new-car sales to protect dealer profitability, he said. "We will have to balance the impact of possible CO2 penalties with our sales targets, but we also have to consider the sustainability of our dealer network," Marumoto told Automotive News Europe in an interview.