Car producers criticize EU proposal on energy transition in the industry

Other stakeholders warn of weakening of Europe's climate strategy

The EU’s proposal to relax emission reduction rules for the automotive industry has been criticized by the sector, according to Bloomberg.

Although the proposal includes lifting the ban on the sale of cars with internal combustion engines, it still requires automakers to use green steel and renewable fuels as compensation.

The automotive industry may still get more concessions in the further process — the proposals are being submitted to the European Parliament, member states will discuss them and make changes before the tripartite negotiations that will determine the final form of the regulation. Several governments have already made it clear that they will insist on further changes, in particular regarding compliance mechanisms.

The German industry group VDA has said the plan is disastrous and insufficiently effective. It believes that the sector is being burdened with additional reporting requirements and notes that compliance with emission standards is linked to the availability of green steel or renewable fuels, which car manufacturers do not control.

The European Automobile Manufacturers’ Association has called for more decisive measures and “flexibility” on emissions for cars and vans by the end of the decade.

Car manufacturers Volkswagen and Stellantis described the proposal as a first step, but advocated for greater flexibility. VW, among others, noted that “made in Europe” requirements must be practical and realistic.

At the same time, environmental groups and other stakeholders warn that these plans could weaken Europe’s climate strategy and be a step backward in the transition to electric vehicles.

In particular, the E-Mobility Europe trade group, which represents infrastructure and battery suppliers and network operators, said that the EU is watering down its 2035 targets and backing away from them, reducing its ambitions for electric vehicles. Investors who have invested capital in an electrified future have been left undervalued, they noted.

Earlier, Ford CEO Jim Farley warned that Europe could undermine the activities of its own automakers if it continues to set ambitious rules and then adjusts them at the end of each year.