European Union automotive emission policy negotiations

The European Parliament has reached a provisional compromise on a new automotive package following negotiations between centrist groups, including the EPP, S&D, and Renew. The agreement modifies 2035 zero-emission targets by replacing mandatory electric vehicle quotas for large corporate fleets with “indicative national objectives.” To support European industry competitiveness, the framework introduces stricter “Made in Europe” labeling requirements.

In response to the compromise, industry representatives such as the German Association of the Automotive Industry (VDA) and the European Automobile Clubs (EAC) have called for further technological openness. The current proposal suggests manufacturers reduce average CO2 emissions by 87.5% by 2035, with the potential to reach a 95% reduction if manufacturers utilize climate-friendly steel produced within Europe. This structure could allow for the continued registration of internal combustion engines and plug-in hybrids.

Industry leaders have expressed concerns that the compromise remains insufficient, with the VDA advocating for a 90% CO2 reduction target and increased use of renewable fuels. Additionally, the EAC is pushing for consumer choice, supporting a category where vehicles running exclusively on approved renewable fuels would be classified as emission-free for fleet limit calculations beginning in 2030.