EU action plan for car industry leads to weakening of climate targets
At the beginning of March, the European Commission presented its action plan for the automotive sector in Europe. It is the result of the strategic dialog on the future of the European automotive industry initiated by EU Commission President Ursula von der Leyen in January. Among other things, the Commission will provide 1.8 billion euros for a secure and competitive supply chain for battery raw materials. The European automotive sector is at a critical turning point and is facing rapid technological change and increasing competition. According to critics, the EU Commission's action plan would penalize car manufacturers that are on track and remove the most important incentive for electrification.
The European Commission's plan does contain important measures to boost demand for European e-cars. These include a law that promotes e-cars in company fleets. However, the plan gives car manufacturers two additional years to meet the 2025 CO₂ targets. The Commission is thus undermining the most important incentive for EU car manufacturers to catch up in the race for electrification, according to the analysis of the European umbrella organization for clean transport and energy (T&E).
William Todts, T&E Executive Director and participant in the Strategic Dialogue, said: "The weaker EU regulations for clean cars reward manufacturers that have missed the targets. To buckle now will secure short-term gains for the European car industry, but will widen the gap with China in the long term. The EU risks damaging uncertainties in the transition to electric vehicles in Europe. T&E expects an action plan for the automotive industry that restores confidence. Europe and our industry must get back on track so that only zero-emission vehicles are sold here in 2035."
CO2 fleet targets postponed by two years
It will present additional flexibility options this month through a targeted amendment to the CO2 emission standards for passenger cars and light commercial vehicles. The change would allow car manufacturers to meet their targets by calculating their reduction performance over a three-year period (2025-2027). This would allow them to compensate for shortfalls in one or two years by over-achieving in the other years, while maintaining the overall target for 2025.
The currentCO2 target for 2025 is achievable for European car manufacturers. They still have until the end of the year to meet it. If the Commission now changes the timeframe in which manufacturers have to meet the target, the pressure to offer more affordable models will decrease and the manufacturers who have invested in compliance will be penalized, explains T&E Germany, Europe's umbrella organization for clean transport and energy. The measure, which still has to be approved by EU governments and MEPs, is an unprecedented gift to the European car industry in the middle of the year of compliance.
In his Spiegel newsletter, Kurt Stukenberg sees this as a further retreat by the EU Commission and Ursula von der Leyen from their Green Deal climate policy and a threat to the long-term climate targets by watering down the interim steps.
Von der Leyen, on the other hand, explained that the change would give the industry more "leeway", but the overall objectives would not change.
"But the approach is risky. Because the underlying message is: if it seems politically or economically opportune, even long-established climate targets are being called into question."
Kurt Stukenberg, Spiegel
There are analyses and studies showing that sales of e-cars have increased as a result of the CO2 fleet targets. "The higher the
level of ambition of the regulation, the higher the effectiveness of the regulations in terms of GHG emission reduction and the level of innovation in the European automotive industry," writes the Federal Environment Agency.
Conversely, more combustion cars will now be sold in the next two years, which means that over an approximate period of ten years, greenhouse gas pollution will be higher than expected, leading to more climate damage and poorer air quality.
Electrifying company fleets
The Commission will propose an EU law on clean company fleets, according to a communication published today. Such a regulation would strengthen the competitiveness of European car manufacturers, as 62% of their vehicles are sold on the corporate market. A T&E analysis shows that fleet electrification targets could guarantee EU manufacturers a demand of more than 2 million e-cars in 2030 - half of the e-car sales they would need on average to meet their binding 2030 CO₂ emission targets.
Supporting battery production
It is crucial that Europe achieves a cost-competitive EU battery cell production that covers a large part of the battery supply and creates European added value along the supply chain. The Commission will provide €1.8 billion for a secure and competitive battery raw materials supply chain, as well as funding from the Innovation Fund for Production, according to the official statement.
The Commission has declared that it is examining support for battery production in the EU as well as so-called "local content requirements", i.e. fixed proportions of local added value for materials and production. But this is too little and too late, says T&E Germany. At least 100 GWh of battery capacity was cut last year as European manufacturers struggle with global competition, subsidies in other countries and the lack of a level playing field. The EU is also considering financial support for battery recycling. The industry has huge potential to keep key raw materials in Europe and thus reduce mineral imports, but is struggling to gain a foothold in Europe.
"The long-term climate goals are at risk if the intermediate steps are repeatedly called into question," concludes Stukenberg, and we can only agree with this. And every day we are confronted with the already visible consequences of the climate crisis.
Left:
EU press release from 5.3.2025
European umbrella organization for clean transport and energy
