EU eases car emission rules in new action plan
EU weakens car emission targets, giving automakers until 2027 to comply. Critics warn it slows EV adoption, while carmakers welcome relief.
Published on March 7, 2025
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Mauro swapped Sardinia for Eindhoven and has been an IO+ editor for 3 years. As a GREEN+ expert, he covers the energy transition with data-driven stories.
After weeks of discussion with industry stakeholders, the European Commission published the Automotive Action Plan on Wednesday, watering down previous emission targets. Carmakers had to meet the average of 93.6 grams per kilometer for all new car deliveries in the EU, progressing towards zero emissions by 2035. Not complying would have resulted in billions of euros in fines, but now, carmakers have until 2027 to meet the standards.
The European automotive sector is experiencing its most challenging moment in history, grappling with fierce competition from China and the switch to electric mobility. As a result, European manufacturers announced 88,000 job reductions. The industry is one of Europe’s largest, employing 13 million people—10.3% of EU manufacturing jobs. This crisis prompted the European Commission to launch a strategic dialogue on the sector's future, culminating in the Action Plan.
To help the industry, the Commission thus decided to extend the 2025 CO2 compliance target, while keeping the ones for 2035 and 2040 in place. “We will stick to our agreed emissions targets with a pragmatic and flexible approach. Our mutual aim is a sustainable, competitive, and innovative car industry in Europe that benefits our citizens, our economy, and our environment,” said Commission President Ursula von der Leyen in a statement.
Batteries, AI, and corporate fleets
The Commission's plan includes substantial financial support, with €1.8 billion allocated to secure battery raw materials supply chains. The initiative comprises direct production support for battery manufacturers and expanded funding supporting the reskilling of displaced workers. The Commission will also look into direct production support to companies producing batteries and non-price criteria for components such as resilience requirements.
The plan went out with the Decarbonise Corporate Fleets Communication highlighting best practice examples and encouraging Member States to take further actions to green corporate fleets, which account for around 60% of new car registrations.
In an effort to catch up in the race to build autonomous, AI-powered vehicles, the action plan launches the institution of a dedicated European Connected and Autonomous Vehicle Alliance. The alliance, which will bring industry stakeholders to develop next-generation vehicles, will be supported by €1 billion in public-private investment.
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Industry reactions
NGO Transport and Environment (T&E) was disappointed with the amendment to the 2025 targets. The organization warns that the relaxed CO2 targets could result in 880,000 fewer electric vehicles being sold between 2025 and 2027. According to T&E, expanding the compliance window “undermines the greatest incentive for EU carmakers to catch up in the race to electrify.” The NGO called the plans for European battery manufacturing are “vague,” while welcoming the proposal to accelerate the electrification of company cars.
Electric mobility lobby E-Mobility Europe was also unhappy with the weakening of the CO2 regulation, calling to maximize what the plan proposes. “Next, the European Commission needs to deliver strong corporate fleet legislation backed by governments taking more responsibility to incentivise electric vehicle purchase and use smartly. And it must deliver today’s announced battery booster package with the necessary financial backing, to support the scale up of Europe’s domestic battery supply chain at a critical time,” said the secretary general Chris Heron.
Carmakers welcomed the amendment on CO2 targets positively. The European Automobile Manufacturers' Association (ACEA) views the flexibility in targets as a welcome first step towards a more pragmatic approach to decarbonisation. However, ACEA notes that the plan lacks an explicit commitment to review emission standards in 2025, particularly for heavy-duty vehicles. ACEA welcomes the Action Plan’s recognition of the need to streamline regulation, work on regulatory simplification, and take steps to enhance Europe’s competitive edge in other fields, such as autonomous driving.
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