Carmakers would cut CO2 from new vehicles by 90% from 2035, and the remaining 10% would no longer need to be offset, according to the joint text announced on 16 October.
New combustion-engine models could still be sold as long as carmakers' overall fleets meet the new emissions limits, per the compromise reported on 16 October.
Britain would be included in the Made in Europe rules only under a separate agreement on reciprocity and alignment with EU investment and protective measures.
Car purchase subsidies would go mainly to vehicles built in the EU, the UK and EEA countries, while Berlin accepted tougher state aid conditions.
Chancellor Friedrich Merz called the deal a good day for drivers and jobs, while Greens MP Swantje Michaelsen warned it creates new uncertainty for the German car industry.
France and Germany announced a joint position on EU car emissions rules on Friday, 16 October, aiming to build a new majority in the European Union for revising the plan to end sales of new combustion-engine cars in 2035. Under the compromise, carmakers would cut CO2 emissions from new vehicles by 90% from 2035 instead of the full 100%, and the remaining 10% would no longer need to be offset through climate-neutral fuels or other measures. Carmakers could keep selling new petrol and diesel models as long as their overall fleets meet the new limits. AFP diplomatic sources said the agreement had been concluded on Thursday, and the text would extend the so-called super-credits, which the Commission had suggested for small and affordable electric cars, to all vehicles regardless of size or length.
The Commission had proposed the 90% cut in 2025, with the remaining 10% to be covered by low-carbon steel and investment in alternative fuels. Berlin accepted tougher conditions on state aid to carmakers, and car purchase subsidies would flow mainly to vehicles built in the EU, the UK and European Economic Area countries. Green steel and aluminium used in European production would count favourably in companies' emissions calculations. The Made in Europe rules would cover countries that were members of the EU single market on 1 January 2020, a group that includes the UK. British inclusion would need a separate agreement ensuring reciprocity and alignment with EU rules on investment from third countries and with EU protective measures. A spokesperson for the UK prime minister's office at 10 Downing Street said including Britain would be a positive development for its domestic car industry, but that the Franco-German proposal still had to secure consensus.
Chancellor Friedrich Merz wrote in a post that the agreement was good news for drivers and jobs.
“A good day for drivers and jobs in Germany, France and Europe.”
He said he and Emmanuel Macron had agreed on measures covering freedom of choice, technological neutrality and climate targets, a message in favour of investment. Finance Minister Lars Klingbeil said the deal strengthened domestic production, with more products labelled made in Germany and made in Europe, and that Germany should not be limited to assembling Asian components. He added that carmakers had to invest in German sites and secure jobs. Macron stressed that Europe must keep innovating, investing and producing while protecting the climate and jobs. Environment Minister Carsten Schneider argued that electric cars would prevail regardless because of their technological lead, and that the deal gave time and incentives to invest in European production. Lower Saxony premier Olaf Lies, who sits on the Volkswagen supervisory board, called the deal a strong signal for jobs at makers, suppliers and plants in the state.
Swantje Michaelsen, a Greens MP responsible for transport, took the opposite view.
“Whoever weakens the 2035 targets now creates new uncertainty and puts the competitiveness of the German car industry at risk.”
She accused the federal government of holding back the car industry rather than supporting it, and said the problem lay in the chancellor's assumptions, not in the combustion engine. Environmental groups were deeply disappointed, since they had wanted a full switch to battery electric cars by 2035.
Before the announcement, diplomatic sources cited by Reuters described the agreement as close but the French-German draft as not yet finalised. The draft would define Made in Europe to cover the 27 member states and other European partners in the single market on 1 January 2020. Paris has pressed for rules that favour only products made inside the EU, while Germany and other member states argue that third countries closely tied to car supply chains or with free trade agreements should be included. Paris also accepted more flexibility for combustion-engine vehicles, which Berlin had sought to protect its car industry. Non-EU countries could join the arrangement voluntarily, according to the draft, and the proposals still need to win a majority across the bloc.
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The compromise would cut new-car CO2 by 90% from 2035 instead of 100%, and could let Britain count as Made in Europe under a separate deal. The draft still has to win backing across the EU.
AI text based on reports by Deutsche Welle, Ειδήσεις, Η Ναυτεμπορική and other publishers. Published .