France, Germany near deal on car emissions, Britain 'Made in EU' status
XLY•France and Germany are nearing a plan to set the EU’s 2035 car-emissions target at a 90% reduction from 2021 levels, without further compensatory measures, and include Britain in automotive “Made in Europe” rules. The plan still needs approval from other EU members and the European Parliament.
1. Emissions target proposal
The Franco-German plan would set the 2035 target for car emissions at a 90% reduction from 2021 levels, without requiring automakers to close the remaining gap through low-carbon steel or alternative fuels. The European Commission had proposed a 90% reduction with those additional measures needed to reach 100%; the proposed change broadly aligns with German carmakers’ wishes.
2. Britain and EU rules
The plan would define “Made in Europe” for the automotive sector as covering the EU’s 27 countries and other European partners that were part of the EU internal market on January 1, 2020, which would include Britain. That inclusion would be subject to full reciprocity and alignment with EU conditions, potentially requiring Britain to adopt EU measures limiting imports of Chinese-built hybrid and battery electric vehicles.
3. Approval still needed
France and Germany still need to convince other EU members and the European Parliament for the plans to take effect. In Germany, the environment minister has suggested a 95% target, with a further five-percentage-point reduction offset through low-carbon steel.
