European Parliament will vote on looser CO2 restrictions for carmakers this week

Members of the European Parliament today approved the fast-track of a regulation to loosen CO2 emissions reduction targets for carmakers – which is now due to be voted on this Thursday, May 8.

The current regulation sets a target to reduce average CO2 emissions from new cars and vans across the EU by 15% annually compared to 2021, starting in 2025. The proposed amendment would allow manufacturers to comply with their obligations for the years 2025, 2026 and 2027 by averaging their performance over the three-year period, rather than for each individual year.

Carmakers welcomed the proposal when it was announced in March, after warning that they would likely face fines of billions of euros for being unable to comply this year. Under the updated rules, they would be able to balance any excess annual emissions by outperforming the target in subsequent years.

These changes will now be submitted to a vote this week as an urgent procedure.

“The proposal(...) followed the strategic dialogue on the future of the automotive industry launched by Commission President Ursula von der Leyen on 30 January 2025, which involved an open public consultation and discussions with both sides of industry and stakeholders to address the most pressing challenges facing the sector,” the European Parliament said in a statement.

Automotive decarbonisation regulation

Announcing the proposed changes in March, EU Commission President Ursula von der Leyen said: “We need to listen to the voices of the stakeholders that ask for more pragmatism in these difficult times, and for technology neutrality. Especially when it comes to the 2025 targets and related penalties in case of non-compliance. To address this in a balanced manner, I will propose a focused amendment to the CO2 Standards Regulation this month. Instead of annual compliance, companies will get three years.”

At the time, she was confident that the “targeted amendment” should be agreed swiftly by the European Parliament and Council.

Car manufacturers have long argued that the slow transition to electric vehicles is due to limited demand from consumers, but think tanks have accused them of not investing enough in the development of the EV supply chain. 

A December 2024 analysis by the World Benchmarking Alliance showed that only 23% of the world’s top 30 automotive manufacturers have promised to increase future spending on low-carbon technology.