EU eases carbon rules to boost auto competitiveness, support EU-made vehicles, batteries

BRUSSELS

The European Commission on Tuesday unveiled a new automotive package aimed at giving carmakers greater flexibility to meet CO2 emissions targets, while reinforcing support for vehicles and batteries produced in the EU.

The package maintains the bloc's commitment to climate neutrality by 2050 and clean mobility by 2035, but introduces new flexibilities in emissions rules for cars, vans and heavy-duty vehicles, alongside measures to cut red tape and strengthen Europe's battery industry, according to a statement.

Under the revised framework, carmakers will still be required to achieve a 90% reduction in fleet-wide tailpipe emissions by 2035. However, the remaining 10% of emissions can be compensated through the use of low-carbon steel made in the EU, as well as e-fuels and biofuels.

This flexibility enables technologies such as plug-in hybrids, range extenders, and combustion engine vehicles to remain on the market alongside electric and hydrogen vehicles.

To ease near-term pressure, the commission introduced "super credits" for small, affordable electric cars made in the EU, a banking-and-borrowing system for 2030-2032, and lowered the 2030 CO2 reduction target for vans from 50% to 40%.

The package also includes a €1.8 billion ($2.1 billion) Battery Booster to strengthen the EU battery value chain and an Automotive Omnibus expected to cut administrative costs for manufacturers by about €706 million ($831 million) annually.

Measures include streamlined testing procedures, exemptions for electric vans from certain regulatory requirements, and the removal of duplicate noise regulations.

Speaking at a news conference at the European Parliament in Strasbourg, European Commission Executive Vice President Stephane Sejourne said the objective of decarbonization by 2035 remains unchanged, but "the modalities of calculation are changing," introducing flexibilities that do not undermine the overall climate goal.

European Commissioner for Climate Wopke Hoekstra described the package as "ambitious, balanced and pragmatic," saying it addresses industry concerns, while preserving investment predictability in the electric vehicle sector and upholding EU climate law.

Valdis Dombrovskis, European commissioner for economy and productivity, said the revised rules introduce "real technological neutrality," while giving consumers more choice and manufacturers more flexibility, without abandoning climate objectives.