European Commission president Ursula von der Leyen has proposed changes to the EU’s CO2 standards, granting car manufacturers a more flexible three-year timeframe to meet emissions targets instead of strict annual compliance.
This change which would allow manufacturers to balance emissions reductions across 2025-2027 rather than meeting a single-year target in 2025, aims to provide more time for carmakers to meet targets while maintaining overall emission reduction goals.
The European Commission said however that it would stick to its target that by 2035 all new cars and vans sold in the European Union would have zero CO2 emissions.
“We stick to the 2035 targets, which means that we stick to the 2025, 2030 and, of course, the 2035 targets,” transport commissioner Apostolos Tsitsikostas.
The proposal follows the second meeting of the ‘Strategic Dialogue on the Future of the European Automotive Industry,’ where industry representatives urged the EU to adjust its carbon regulations to avoid penalties and support competitiveness.
The amendment would introduce a “banking and borrowing” system, enabling companies that exceed emission limits in one year to compensate by selling more low-emission vehicles in subsequent years.
The current regulation mandates a 15% emissions reduction by 2025 from a 2021 baseline, with carmakers facing fines of €95 per gram of carbon dioxide per kilometre emitted above the target for each noncompliant vehicle sold.
Industry groups, including the European Automobile Manufacturers’ Association (ACEA), have warned that maintaining the original targets could result in penalties as high as €15 billion, citing a slowdown in electric vehicle (EV) sales in 2024 as a key challenge.
Environmental organisations have strongly criticized the proposed changes, arguing that they reward manufacturers that failed to invest in clean technology and risk delaying the transition to zero-emission mobility.
They argue that CO2 emissions from new passenger cars fell by 28% between 2019 and 2023, largely due to a surge in EV adoption, and that most automakers were already on track to meet the annual targets.
Von der Leyen defended the amendment, stressing the need for “predictability and fairness” while ensuring continued investment in emissions reductions.
“The proposed flexibility to meet CO2 targets in the coming years is a welcome first step towards a more pragmatic approach to decarbonisation dictated by market and geopolitical realities. It holds the promise of some breathing space for car and van makers, provided the much-needed demand and charging infrastructure measures now also actually kick-in,” said Sigrid de Vries, director general of the European Automobile Manufacturers’ Association (ACEA).