France and Germany strike a deal to loosen EU car-emissions rules

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Paris and Berlin back softer EU CO2 rules for carmakers and a narrower "made in Europe" definition.

France and Germany have reached a long-negotiated deal on the future of Europe's car industry, AFP reports via France 24. The two countries had disagreed for a long time about how the EU should revive its struggling automakers, and their agreement is expected to shape the bloc's policy from here.

Each side got one big win. Germany wanted looser carbon targets for carmakers, and it got them. France wanted to protect the EU's climate goals and keep the "made in Europe" public-procurement rules mostly limited to European countries, and it won on that second point, according to a draft of the pact described by AFP.

Some background: the European Commission had proposed replacing the EU's planned 2035 ban on new gasoline and diesel car sales with a rule requiring automakers to cut new-vehicle exhaust emissions by 90 percent. The remaining 10 percent would have had to be offset with credits, for example from using low-carbon steel. The Franco-German deal drops that offset requirement, saying manufacturers shouldn't have to compensate for leftover emissions.

The deal also widens "super credits" that the Commission had proposed for small, affordable electric cars, extending them to all vehicles regardless of size or length. AFP says that makes it much easier for automakers to hit their targets.

On "made in Europe," the pact limits the definition for cars to the EU's 27 members, with an opt-in for a few others, notably Britain and Norway under certain conditions. That is narrower than the Commission's March proposal, which tied access to public money to minimum shares of EU-made parts and could have included dozens of partner countries.

For drivers, the practical effect is that gasoline and hybrid cars look set to stay on sale in Europe longer, and with less pressure on automakers, the push toward EVs in that market may ease. This is a deal between two countries, though, not final EU law.

Sources: France 24 / AFP