France and Germany have drafted a preliminary agreement to adjust the European Union's Auto Package. The proposal suggests that automakers reduce fleet CO2 emissions by 90 per cent by 2035, instead of the previously mandated 100 per cent. Under this new framework, manufacturers would not be required to offset the remaining 10 per cent of emissions.
The agreement reflects a compromise between French President Emmanuel Macron and German Chancellor Friedrich Merz. France has agreed to support the relaxation of CO2 targets, while Germany has conceded to stricter 'Made in Europe' requirements for state subsidies. The document emphasizes linking public funding more closely to European value creation.
The proposal cites significant technological, economic, and geopolitical shifts as the rationale for rebalancing climate goals with industrial competitiveness. The document suggests that the use of renewable fuels in existing vehicle fleets should be accounted for, covering the residual 10 per cent of emissions that manufacturers would otherwise need to offset.
The initiative has faced criticism from various stakeholders. Representatives from Transport and Environment warned that the move could slow electric vehicle adoption. Additionally, members of the European Parliament expressed skepticism, noting that the reduced ambition in CO2 targets makes meeting climate goals in the transport sector significantly more difficult.
