Commission Agrees to Water Down Automotive Emission Targets

by Jordyn Dahl (Politico) The European Commission said Monday (March 3, 2025) it will change the way it calculates emissions targets for carmakers in a bid to help the deeply troubled industry. The executive will put forward an amendment to allow the targets to be based on a three-year average instead of on this year's sales — making it easier for the industry to hit the target without facing steep fines.

"We need predictability and fairness for those who did their homework successfully," said Commission President Ursula von der Leyen after her second meeting with the bloc's biggest automakers and suppliers this year. "We have to stick to the agreed targets, but we need to listen to voices who ask for more pragmatism and technological neutrality."

The current regulation requires carmakers to reduce their emissions by 15 percent in 2025 from a 2021 baseline or be fined €95 per gram of carbon dioxide per kilometer emitted above the target for each noncompliant vehicle sold in the bloc.

The industry had complained that could see the sector hit with fines of up to €15 billion.

Under the executive's latest proposal, carmakers will need to meet the emission reductions over the course of 2025-2027 instead of just 2025.

The scheme was proposed by the European People's Party (EPP), which is part of von der Leyen's political family and is the largest grouping in the European Parliament. Any amendment to the law will have to be approved by both the Parliament and European Council.

The 2025 emission target is part of the broader Green Deal effort to slash transport emissions by ending the sale of new combustion engine vehicles from 2035. A review of the law is set for 2026, but the Commission said on Monday it will "speed up" that review and include "technological neutrality as a core principle."

The EPP and industry insiders have called for the law's review to be conducted in 2025, which could bolster their argument for tweaking the broader legislation as the review would then be based on 2024's sluggish EV sales figures.

Several member countries, led by Italy and the Czech Republic, have been lobbying for biofuels and e-fuels to be included in the law going forward as the fuels can run in existing engines. READ MORE

Excerpt from Reuters: Shares in European automakers, including Volkswagen (VOWG_p.DE), Renault (RENA.PA), BMW (BMWG.DE), and Mercedes-Benz (MBGn.DE) rose by between 1.5% and 4% after von der Leyen's comments.

EU carmakers, which have been hit by falling demand and factory closures, and are now bracing for U.S. tariffs, had urged the Commission to grant relief from fines they say could rise to 15 billion euros ($15.7 billion) for 2025.

The EU executive intends to publish its automotive action plan on Wednesday to ensure EU car producers can electrify their fleets and compete with more advanced rivals.