German state task force joins push to soften EU CO2 fleet rules

EU CO2 fleet limits and the 2035 combustion-engine ban decide which cars automakers can sell in Europe, and what buyers are offered. The Franco-German outline would leave a 10% opening for combustion-engine cars after 2035.

For buyers, the outline could keep some combustion-engine cars on sale after 2035. For automakers, it would soften fleet limits. It is not law. Any change needs the Council and the European Parliament.

The 3 November agenda from Baden-Wurttemberg's task force sets out demands for more flexible EU fleet emissions limits, adjustments to CO2 reduction targets and credits for low-carbon materials and fuels. Its members include Audi, Mercedes, Daimler Truck, Porsche and Bosch, alongside IG Metall and Gesamtmetall. The panel last met on Monday afternoon. Regional newspaper Badische Neueste Nachrichten reported the demands on Tuesday, according to Anadolu Ajansı. It proposes a separate category for vehicles powered exclusively by biogenic fuels and electricity-based synthetic fuels. On fleet regulation the panel is explicit: "We advocate incentives rather than strict quotas". It also urges investment in hydrogen, renewable fuels and charging infrastructure, plus faster grid connections.

State Economy Minister Nicole Hoffmeister-Kraut said companies need viable conditions. "We need decisions now that will make our location more competitive again," she told the newspaper.

Reaction and spillover

The rules do not stop at the EU's borders. T&E called the Franco-German outline a "historic mistake" that weakens climate ambition and Europe's car industry, in a 30 October article. Britain will adopt the EU's Euro 7 emissions standards, Autotrade.ie reported on 30 October. Vietnam.vn reported the same day that EU trade regulations threaten the recovery of the UK automotive industry. Social Europe said on 28 October that the Made in Europe label shuts out Morocco and Turkey.

The Franco-German outline behind the demands

French President Emmanuel Macron said at the Paris Motor Show on 12 October that an agreement on EU automotive policy was imminent. France was finalising it with Germany, he said. Germany wants the 2030 emissions-reduction targets for automakers relaxed. It also seeks to ease the EU ban on new combustion-engine car sales from 2035. The central proposal would let combustion-engine cars account for up to 10% of total new-car sales even after 2035. In exchange, France appears likely to secure support for concentrating public subsidies and procurement contracts in EVs and batteries on manufacturers inside the EU.

Two countries cannot change EU law alone. Amendments need approval from the Council and the European Parliament.

Why Brussels is wary

Behind the push sits China. According to ACEA, 20% of BEVs sold in the EU last year were manufactured in China. JATO Dynamics put Chinese brands' European market share at 5.1% in the first half of last year, up from 2.7% in the first half of 2024. Their sales surged 91% over the same period. The EU has answered with trade barriers, starting with an anti-subsidy investigation into Chinese-made electric vehicles in 2023.

What happens next

The task force wants decisions now. Any amendment to EU vehicle rules still requires approval from the Council, which represents member states, and the European Parliament.

The Franco-German outline is not a formal EU proposal yet. Whether Brussels will adopt the 10% allowance remains open.