The European Commission has presented as expected on Tuesday its broad Automotive Action Plan aimed at supporting the competitiveness of Europe’s car industry while maintaining the EU’s long-term climate objectives.
Central to the proposal is a revision of the framework governing CO₂ emissions from new cars and vans after 2035, combined with industrial support measures for batteries, supply chains, and fleet electrification.
According to the Commission, the plan responds to “major structural challenges” facing the European automotive sector, including global competition, technological transformation, and uneven electric-vehicle uptake across member states.
“We must ensure that Europe remains a place where cars are designed, developed, and manufactured,” Commission President Ursula von der Leyen said when presenting the package. “Our goal is clear: climate neutrality, competitive industry, and affordable mobility must go hand in hand.”
Revised emissions approach
The most prominent element of the proposal is a shift away from a de facto ban on internal combustion engine (ICE) vehicles, scheduled for 2035.
Instead, the Commission proposes that new cars and vans placed on the market from that year must achieve a 90 per cent reduction in CO₂ emissions compared with 2021 levels.
The remaining emissions could be addressed through technology-neutral compliance pathways, potentially including sustainable fuels or low-carbon production inputs.
“We are moving from a purely technology-based rule to a performance-based approach,” a senior Commission official said. “What matters is achieving emissions reductions in a way that is feasible for industry and consumers.” The Commission stressed that interim emissions targets for 2035 and earlier remain unchanged and legally binding.
Industrial support measures
Alongside the revised emissions framework, the Commission announced measures to strengthen Europe’s automotive ecosystem.
These include €1.8 billion in support for battery manufacturing, primarily through zero-interest loans, to develop a competitive EU-based battery value chain. The plan also consists of an “automotive omnibus” to simplify regulatory and reporting requirements for manufacturers and suppliers.
On the demand side, the Commission proposes stronger decarbonisation measures for corporate fleets, which account for a large share of new vehicle registrations in the EU.
In addition, it signalled its intention to create a new regulatory category for small, affordable electric cars to improve consumer accessibility and support urban mobility.
First industry reactions
Initial reactions from the automotive industry have been mixed but measured. The European Automobile Manufacturers’ Association (ACEA) said the proposal “recognises the complexity of the transition” and welcomed the shift toward technology neutrality as “a more realistic framework for achieving emissions reductions while preserving competitiveness”.
Several manufacturers echoed that view. A spokesperson for a major German OEM said the plan “creates room for innovation across different technologies” and “acknowledges market realities”.
At the same time, companies with more EV-focused strategies expressed concern about regulatory uncertainty. Volvo Cars said in a statement that “clear and predictable regulation is essential to sustain long-term investment in electrification” and cautioned against frequent changes to agreed timelines.
Political responses
Political reactions reflected long-standing divisions among member states. Germany and Italy welcomed the Commission’s approach, with German officials reiterating the importance of keeping options such as e-fuels open. Italy’s government said the proposal “protects industrial diversity and employment while maintaining environmental objectives”.
Other countries adopted a more cautious tone. Representatives from several northern and western EU member states emphasised the need to preserve the credibility of the EU’s climate targets and warned that flexibility should remain strictly limited.
In the European Parliament, the centre-right European People’s Party described the proposal as “a pragmatic correction”, while the Greens criticised it as a weakening of the Green Deal.
Liberal and social-democratic groups said they would scrutinise the technical details closely, particularly the definition and verification of any compensation mechanisms.
What this means for the Benelux
For the Benelux, where electrification is already relatively advanced, the implications are more about confidence than immediate policy change.
Belgium and the Netherlands have built much of their EV transition around company-car taxation and predictable EU rules. At the same time, Luxembourg relies heavily on fleet electrification for its cross-border commuter flows.
National measures are unlikely to change overnight, but a softer EU end date complicates long-term planning. For fleet operators, leasing companies, and infrastructure providers, EU-level uncertainty feeds directly into risk assessments, residual values, and investment decisions, influencing not only today’s EV uptake but also how decisively the next decade is planned.
Timeline: what happens next
The Automotive Action Plan marks the start of the legislative process, not its conclusion. The Commission presented the proposal in December 2025.
During 2026, the European Parliament and the Council of the EU will begin formal negotiations, with parliamentary committees drafting amendments and member states defining their positions.
Trilogue negotiations are expected to run through 2026 and 2027, with final legislation likely to be adopted by 2027 or 2028. A review period is foreseen between 2028 and 2030 to assess market developments and technological progress. The revised emissions framework would take effect in 2035, subject to the final rules agreed by legislators.
The Commission has underlined that the outcome will depend on negotiations with Parliament and member states. “This is the start of a political discussion,” von der Leyen said. “We look forward to working with co-legislators to deliver a framework that works for Europe.”
