Amid mounting regulatory pressures and international trade challenges, the European Union has provided crucial support to automakers. Following active lobbying from key players in the automotive industry, the EU will soften upcoming CO2 emission standards.
This is a significant victory for auto conglomerates, which are already facing the consequences of tariff restrictions and their impact on global markets and supply chains.
Initially, the EU demanded a 15% reduction in emissions by 2025 compared to 2021 levels. Manufacturers strongly objected, calling the targets unattainable and warning of potential fines of up to 15 billion euros. Under current rules, companies pay 95 euros for every gram of CO2 over the limit, multiplied by the number of cars sold – the sums add up quickly.
Last month, the European Parliament proposed a compromise. Instead of assessing emissions solely for 2025, they will be calculated as an average value for 2025-2027. This will give manufacturers additional time to ramp up the production of electric vehicles, which will compensate for sales of internal combustion engine (ICE) vehicles.
According to media reports, 458 MEPs voted for the changes, 101 voted against, and 14 abstained. The amendment will be officially approved.
The Changes Came Just in Time
The softening of requirements will help European brands compete with Chinese rivals. However, not everyone approves of these changes.
According to Lucien Mathieu from Transport & Environment, the delay will allow manufacturers to reduce their efforts in developing innovative electric vehicles.
“It is ironic that the EU is postponing emission targets precisely during a surge in electric car sales,” he noted. “This boom was ensured by new affordable models designed to meet the initial requirements. The delay will slow down the pace of transition to electric vehicles and investments in the industry.”