The European Union, facing a potential collapse in the car industry, is backing down on a 2025 deadline for imposing penalties on CO2 emissions. Instead of a strict annual compliance check, carmakers will now be given three years to meet their targets - a move described by President Ursula von der Leyen as a “targeted amendment“.
This is not just a change, it is a lifeline. Under the original rules, manufacturers that exceeded the EU average CO2 emissions would have been subject to a terrifying fine: €95 per gram of excess CO2 multiplied by the number of cars sold. Renault CEO Luca de Meo warned of a potential €15 billion hit to the industry.
The pressure for change was immense, fueled by industry demands and the specter of retaliatory US tariffs under a Trump presidency. Von der Leyen acknowledged the need for “more flexibility”, balancing the demands of compliant manufacturers with those seeking a more “pragmatic” approach in a turbulent period.
“Giving the industry more breathing space”, as she put it, means “more clarity without changing the objectives”. The EU is confident that the amendment will be adopted quickly.
Italian Industry Minister Adolfo Urso hailed the decision as a “lifeline” for the European car sector, saying it vindicated Italy’s position. The European Automobile Manufacturers Association ACEA, which previously warned of the negative impact of the initial rules on competitiveness, has yet to make an official statement.
This policy change comes amid a perfect storm for the automotive industry: a costly transition to electric vehicles, fierce competition from Chinese and American manufacturers, and the looming threat of trade wars. The EU's decision is a clear attempt to provide stability and avert a potential economic crisis in the automotive sector.