The EU Parliament has approved the Commission’s request to soften the 2025 CO2 fleet targets. The proposal received 458 votes in favour, 101 against, and 14 abstentions. All that remains is for the European Council to approve it, which is probably a mere formality.
The more flexible CO2 targets are one measure the EU Commission is taking to improve the competitiveness of the European car industry. The proposal allows car manufacturers not to directly achieve the known CO2 fleet targets for 2025 this year, but only in the three-year average between 2025 and 2027. This is one of the results of the EU strategy dialogue on the car industry’s future, which was launched at the beginning of the year.
With the decision taken by the European Parliament on Thursday, the EU Council, representing the member states, still has to approve the EU legislation. This step is generally considered more of a formality. As the EU Parliament announced, the Council already approved the exact text on Wednesday, so all that is needed now is the Council’s formal approval of a text that has already been approved in terms of content.
Targets don’t change, implementation does
When EU Commission President Ursula von der Leyen presented the results of the EU strategy dialogue at the beginning of March, the weakening of the long-known CO2 targets for 2025 was one of the biggest topics. The current regulations set targets for five-year periods to reduce the average CO2 emissions of new cars and vans. The targets from 2025 to 2029 correspond to an annual CO2 reduction of 15% compared to the 2021 values.
The target values themselves are not to be adjusted. The draft amendment presented by the EU Commission at the end of March and officially submitted in April introduces the flexibility to fulfil the targets over three years. Car manufacturers will no longer have to achieve the CO2 fleet targets in 2025, 2026, and 2027 directly in the respective year; the average will now count.
This means that a car manufacturer that falls significantly below the CO2 emission limits this year could exceed them next year, and vice versa. A balance sheet will be drawn up at the end of 2027, and car manufacturers that have achieved their CO2 fleet target on average over the three years will go out without a penalty.
Serious criticism
As expected, the decision of the EU MPs was met with severe criticism from environmentally concerned parties. Peter Mock, Director of the International Council on Clean Transportation (ICCT) Europe, reacts: “This flexibility represents a setback for Europe’s clean transport strategy. Some manufacturers might benefit from a short-term relief to adjust their electric vehicle portfolios, but it comes at the cost of delaying broader market access to affordable electric cars.”
“At this critical transition stage, Europe cannot afford to slow momentum toward electrification.” He added that further delays risk undermining the EU’s industrial leadership and will have long-lasting consequences for emissions reductions and competitiveness.
ICCT stipulates that under the approved averaging mechanism, manufacturers are expected to exceed their 2025 CO₂ targets and compensate in 2026 or even only in 2027. This will result in more combustion engine vehicles for a longer period, fewer electric vehicles, and substantial excess emissions.
ICCT estimates these excess emissions can range from 26 to 51 megatons of additional CO2. “For comparison, this is equivalent roughly to the entire annual CO₂ emissions of a country the size of Denmark or Greece,” the ICCT concludes.
The green NGO Transport & Environment (T&E) says that the delay is an unnecessary gift to the auto industry, just as electric car sales are surging in Europe. “It will only hold back the transition to EVs and undermine investment certainty in European manufacturing.”
“European car manufacturers sold 45% more battery electric cars in the first three months of the year compared to the same period of 2024. Yet the EU Commission responded to pressure from the European car industry by proposing to give automakers until 2027 to comply with their 2025 EU emissions reduction targets,” T&E points out.
Lucien Mathieu, cars director at T&E: “Ironically, the EU is delaying emissions targets for the car industry just as EV sales surge. The boom is thanks to new, more affordable models that the carmakers launched to comply with the original EU target. This delay will allow the industry to take the foot off the gas for the EV roll-out while also slowing down investments.”
T&E frequently called on the EU to stand firm over its future CO2 targets for carmakers, “as Europe cannot afford further delays in catching up with China.”
Aplause also, but not from everyone
Of course, most European car manufacturers applauded the EU decision. Their association, ACEA, reacted immediately: “The proposed three-year averaging framework offers car and van manufacturers much-needed flexibility in meeting CO2 targets at this critical moment in our transition toward zero-emission mobility, accommodating fluctuations in market demand and production cycles.”
ACEA also points out the “lack of enabling conditions” in this transition toward zero-emission mobility. “The introduction of a three-year averaging mechanism is a step in the right direction that acknowledges the complexities and the ongoing difficulties of the automotive market, with slow market uptake and a lack of domestic value chain for batteries,” stated Sigrid de Vries, ACEA Director General.
“While this provides some necessary flexibility for manufacturers in the short term, we need a long-term decarbonisation strategy including more charging stations, purchase and tax incentives, fairer energy prices, while keeping the industry a competitive powerhouse and securing the EU’s strategic autonomy on critical technologies. We look forward to discussing this during the next Strategic Dialogue with the European Commission.”
Nevertheless, there are also dissidents among European manufacturers who stipulate that manufacturers who had done their homework would be punished if the EU softened its rules at the last moment. Not that long ago, they were headed by Stellantis and its flamboyant CEO, Carlos Tavares, but after his ousting, Stellantis rejoined ACEA again and is now an advocate of increased flexibility.
At the recent start of the EX30 production in Ghent, Volvo Cars complained that the change in timing is penalizing the manufacturers who comply. Apart from the huge investments they made to achieve this, it is once again costing them money because manufacturing competitors now won’t be forced to buy CO2 credits from them to avoid fines.BMW Group has been sitting on the same line lately, but is less outspoken.
