France and Germany have reached a landmark agreement to ease EU climate requirements for the automotive sector, joining forces to keep internal combustion engines on ... European roads beyond the planned 2035 deadline.
In a joint statement issued ahead of EU policy reviews, Paris and Berlin proposed a suite of decarbonisation measures featuring "regulatory flexibility" tailored to "different market realities and technological conditions."
Crucially, the proposal allows manufacturers to continue selling petrol, diesel, and hybrid vehicles after 2035, provided overall emissions stay within established thresholds.
Under the new Franco-German framework, the target for carbon dioxide reductions would be set at 90 per cent rather than a total ban, while scrapping the requirement for manufacturers to offset the remaining 10 per cent with low-emission fuels. Furthermore, vehicles powered by renewable fuels would be officially classified as zero-emission vehicles - a major policy victory for Berlin.
German Chancellor Friedrich Merz has spearheaded the political push to revise the 2035 ban, aiming to shield the continent's automotive industry from severe economic headwinds and aggressive overseas competition.
To give carmakers greater room to absorb external shocks and avoid "disproportionate penalties," the two nations are also calling for multi-annual target periods - allowing emissions to be averaged across 2030 and 2031 - alongside a carbon credit reserve mechanism for credits generated in 2029.