According to media reports, the European Commission, under pressure from European car manufacturers, has decided to grant automakers three years to meet new CO2 emission targets for cars and vans, instead of just one year.
European Commission President Ursula von der Leyen stated on March 3, after meeting with automotive industry executives, labor unions, and activist groups, that the Commission will propose later this month allowing companies to comply within three years rather than by 2025. Compliance will now be based on automakers' average emissions between 2025 and 2027.
Von der Leyen emphasized in a press conference that "the (emission) targets remain unchanged, and European automakers must achieve these targets, but they now have a three-year breathing space." However, she added that the proposal still requires approval from EU member states and the European Parliament.
Following the announcement, shares of European automakers such as Volkswagen, Renault, BMW, and Mercedes rose by 1.5% to 4%.
Italy and the Czech Republic, both of which have advocated for relaxed emission penalties, welcomed the move. Italian Industry Minister Adolfo Urso stated that this decision "saved the European car industry," while Czech Transport Minister Martin Kupka said the Czech Republic would push for an extension of the grace period to five years.
Oliver Blume, CEO of Volkswagen, Europe's largest automaker, welcomed the European Commission's "pragmatic approach," which he said balances CO2 reduction efforts with flexibility for car manufacturers, allowing them to introduce more affordable models to stimulate demand.
Renault stated that the EU's flexible approach would help European automakers reduce emissions while remaining competitive as the electric vehicle (EV) market expands.
Sigrid de Vries, Director General of the European Automobile Manufacturers' Association (ACEA), described the proposal as positive but noted that achieving emission targets remains challenging. Matthias Zink, Chairman of the European Association of Automotive Suppliers (CLEPA), argued that the "relief provided by this proposal is limited."
The European Automobile Manufacturers' Association, which has long pushed for a longer extension, previously stated that the European auto industry faces tough choices, including deep price cuts, reduced production, or purchasing carbon credits from U.S. EV maker Tesla and Chinese manufacturers.
However, some companies and organizations have raised concerns about the EU's decision to ease emission regulations.
Volvo Cars argued that companies already prepared for the 2025 emission targets should not be disadvantaged by last-minute regulatory changes. The European transportation research and advocacy organization Transport & Environment (T&E) called the proposal an "unprecedented gift to the car industry," warning that it would further slow Europe's progress compared to China.
T&E Executive Director William Todts remarked, "Competitiveness depends on producing electric vehicles at prices acceptable to mass consumers. This is exactly what Chinese automakers have achieved. Delaying the carbon emission process in Europe will not enhance the competitiveness of European car manufacturers."
Originally, the EU's 2025 emission targets required most automakers to ensure that EVs accounted for at least one-fifth of their total sales to avoid hefty fines. The EU's ultimate goal is to achieve zero emissions by 2035.
To meet these targets and avoid penalties, automakers must sell more EVs. However, European automakers lag behind their Chinese and American competitors in this sector.
In recent years, EU car manufacturers have faced factory closures due to declining demand and are now preparing for U.S. tariffs. They have urged the European Commission to waive penalties, warning that fines in 2025 could amount to as much as €15 billion (approximately $15.7 billion).
