European Commission eases CO2 emission targets in automotive package

Brussels – The European Commission has eased planned CO2 emissions targets for road transport and introduced additional support for battery investments under its long-awaited Automotive Package, presented on 16 Dec.

Framed as an “ambitious yet pragmatic” policy framework towards climate neutrality by 2050, the package revises the planned 2035 ban on combustion engine cars, instead requiring carmakers to cut tailpipe emissions by 90%.

Commission president Ursula von der Leyen said innovation, clean mobility and competitiveness were “top priorities in our intense dialogues with the automotive sector”.

“Today, we are addressing them all together,” she said. “As technology rapidly transforms mobility and geopolitics reshapes global competition, Europe remains at the forefront of the global clean transition.”

From 2035, manufacturers will need to meet the 90% tailpipe emissions reduction target, with the remaining 10% compensated through the use of low-carbon steel “made in the Union”, or via e-fuels and biofuels.

The revised framework allows plug-in hybrids, range extenders, mild hybrids and internal combustion engine vehicles to remain on the market beyond 2035, alongside battery-electric and hydrogen vehicles.

Ahead of 2035, carmakers will be able to benefit from “super credits” for small, affordable electric vehicles manufactured in the EU, a measure the Commission said would incentivise the deployment of more compact EV models.

Additional flexibility is introduced for the 2030 car and van targets, allowing “banking and borrowing” of emissions compliance over the 2030–2032 period.

For vans, where EV uptake has been “structurally more difficult”, the Commission proposed lowering the 2030 CO2 reduction target from 50% to 40%.

Targeted amendments are also proposed for heavy-duty vehicle CO2 standards, easing compliance with 2030 targets.

For corporate fleets, the package sets mandatory targets at member-state level to support the uptake of zero- and low-emission vehicles by large companies.

The Commission also unveiled a €1.8bn “battery booster” initiative aimed at accelerating the development of a fully EU-based battery value chain.

Of this, €1.5bn will be allocated to European battery cell producers in the form of interest-free loans.

Additional policy measures are intended to support investment, foster innovation and improve coordination across member states.

The package also includes an “automotive omnibus” proposal aimed at reducing administrative burden, with expected cost savings of around €706 million per year through cutting red tape.

Measures include reducing the volume of secondary legislation planned for the coming years and streamlining testing requirements for new passenger vans and trucks.

The omnibus also introduces a new vehicle category under the small affordable cars initiative, covering electric vehicles up to 4.2 metres in length, enabling member states and local authorities to design targeted incentives to stimulate demand for EU-made small EVs.