.jpg)
EU proposes looser emission target, but carmakers face mounting pressure. (Photo: iStock)
The European Commission has officially proposed extending the deadline for car manufacturers to meet emission reduction targets, granting them an additional two-year grace period.
However, European automakers are under increasing pressure due to weak demand, rising competition from China, and looming U.S. tariffs. These factors have fueled discussions within the European Parliament about reversing the planned ban on combustion-engine vehicles, with amendment talks possibly starting as early as April.
Automakers gain relief from emission rule changes
Following intense lobbying from European car manufacturers, the European Commission announced on April 1 a revision to CO₂ emission standards for new cars and vans. The proposal changes the penalty system from an annual compliance check in 2025 to a three-year average, effectively delaying enforcement. Despite this adjustment, the EU remains committed to achieving carbon neutrality by 2050.
European Commission President Ursula von der Leyen stated that the proposal allows the auto industry greater flexibility while keeping the EU on track to meet its climate targets. She emphasized that decarbonization and competitiveness can go hand in hand.
However, not all automakers support this proposal. Volvo, majority-owned by China's Geely, has criticized the plan, arguing that it is unfair to companies that have already invested resources and can meet the original targets.
The industry group E-Mobility Europe has also warned that relaxing EU carbon reduction rules could cause Europe to fall further behind China in the electric vehicle (EV) sector and hinder investments in critical infrastructure, such as charging networks.
The European auto market is slowing, with demand declining and creating significant pressure on manufacturers. Stellantis' head of European operations, Jean-Philippe Imparato, has cautioned that unless the EU stimulates the EV market, the grace period will only delay penalties, and some companies may not survive beyond the next two years.
Speaking at a French parliamentary hearing, Imparato also noted that following the proposed regulatory changes, supply chain disruptions have affected hybrid vehicle production. Parts must now be ordered three months in advance, and Stellantis' production output in March dropped by 20,000 units.
The European electric vehicle industry group warns that easing carbon emission rules could cause Europe to lag behind China in the EV sector. (Image: iStock)
EU’s largest political bloc moves to repeal the combustion engine ban
Further complicating matters, European automakers now face potential U.S. tariffs of an additional 25% under President Donald Trump’s proposed trade policies. The U.S. is the EU’s largest auto export market, accounting for nearly a quarter of all EU car exports.
Amid these economic and trade pressures, internal EU discussions about revising the combustion engine ban have intensified. The EU had previously passed legislation in 2023 to prohibit the sale of gasoline and diesel cars starting in 2035.
However, the European People's Party (EPP), the largest political group in the European Parliament, plans to introduce an amendment in the third or fourth quarter of this year to overturn the ban.
The proposed revisions could include allowing combustion-engine vehicles to run on synthetic or biofuels and permitting plug-in hybrid models. German lawmaker Jens Gieseke, a proponent of the reform, has suggested that if Parliament agrees, negotiations to repeal the ban could begin as early as April.
Source: EU, Reuters, Bloomberg, NYT
.jpg)
