EU Just Gave Carmakers Exactly What They Asked For

As global carmakers juggle tightening regulations and international trade headaches, the European Union has thrown them a much-needed lifeline. The EU will ease upcoming CO2 emission standards following intense lobbying from major players in the automotive industry.

It’s a significant win for car manufacturers and comes at a time when they’re already dealing with the fallout from US President Trump’s tariffs and the broader effects those have had on global markets and supply chains.

Originally, the EU had proposed that European carmakers reduce their CO2 emissions by 15% by 2025 compared to 2021 levels. Automakers pushed back hard, calling the target unworkable and warning it could result in up to €15 billion (around $16.8 billion) in penalties. Under the current rules, companies must pay €95 (roughly $107) for every gram of CO2 over the limit, multiplied by each car sold—an equation that quickly adds up.

Read: Europe’s Carmakers Hike Gas Car Prices To Push EV Sales Harder Ahead Of New Mandates

Last month, the European Parliament’s executive presented an amendment more to the auto industry’s liking. Rather than basing emissions solely on 2025, it will average them out across 2025, 2026, and 2027. This will give car manufacturers more time to increase production of EVs to offset the ICE-powered models they continue to sell.

Politico reports that 458 members of the European Parliament voted in favor of the change compared to just 101 who voted against it and 14 who abstained. This key amendment will now be put into law.

Changes Couldn’t Come Soon Enough

The reprieve should help European car brands massively at a time when they face fierce competition from new Chinese brands. However, not everyone is pleased with the change.

According to NGO Transport & Environment cars director Lucien Mathieu, local brands will now be able to take their foot off the gas in introducing new and innovative EVs.

“It’s ironic that the EU is delaying emissions targets for the car industry just as EV sales surge,” he said. “The boom is thanks to new, more affordable models that the carmakers launched to comply with the original EU target. This delay will allow the industry to take the foot off the gas for the EV roll-out while also slowing down investments.”