France and Germany Agree to Soften Proposed EU Car Emission Rules

France and Germany have reached a deal to ease European Union car emission targets, proposing a 90% reduction by 2035 instead of a total ban on internal combustion engines.

The two nations confirmed the agreement on Friday, aimed at shielding Europe's automotive sector from economic pressure and international competition. According to Deutsche Welle, the pact introduces incentives for research and production to ensure future electric vehicles are manufactured within Europe. German Chancellor Friedrich Merz called the deal a positive signal for jobs, while French President Emmanuel Macron stated the move shows a clear ambition to transform the industry while upholding climate goals.

A major shift in the agreement involves revising the 2035 targets for new vehicles. Handelsblatt reported that the leaders agreed in principle to require a 90% cut in exhaust emissions by 2035, removing the previous requirement to offset the final 10%. France 24 noted that Germany had pushed for less stringent carbon targets, while France focused on securing "Made in Europe" public procurement rules. The draft also includes Britain in the definition of "Made in Europe" for vehicle components.

The automotive industry has responded with mixed reactions. Volkswagen welcomed the deal, telling Deutsche Welle it provides "meaningful flexibilities" that help protect competitiveness. However, Hildegard Müller of the VDA auto industry association argued that the pact still falls short regarding battery localization and rules for heavy vehicles. CleanTechnica reported that the deal faced a brief delay when Germany's Social Democratic Party initially raised objections over omitted environmental targets.

This agreement must now gain support from other EU member states and the European Parliament to be enacted into law. The compromise comes as European manufacturers struggle to compete with Chinese rivals and face internal economic challenges, including potential factory closures and job cuts in Germany's massive auto sector.

Background

The European Union previously targeted a 100% transition to zero-tailpipe emission vehicles by 2035. This goal has faced significant pressure as legacy automakers like Volkswagen report lower demand and consider pruning thousands of jobs to pay for the transition to electric vehicle technology.