At a glance
- The environment committee backed an 87.5% emissions cut for new cars, with a further 7.5% counted from EU-made low-carbon steel, bringing the total to 95%.
- For fund selectors with European auto exposure, corporate fleet targets are the concrete change: mandatory zero-emission share targets would become “aspirational” goals, so fleet buyers would no longer have to lift electric volumes.
- The European People's Party, Parliament's biggest group, said it had secured a major victory for the car industry by reversing the combustion engine ban.
European Parliament committees voted Wednesday to set an effective 95% CO2 cut for new cars from 2035, easing the EU's earlier plan to end sales of new combustion-engine cars by that date.
The environment committee backed an 87.5% emissions cut for new cars, with a further 7.5% counted from EU-made low-carbon steel, bringing the total to 95%. The European Commission had proposed 90%, filling the remaining 10% with low-carbon steel and alternative fuels. The committee instead adopted a proposal from three mainstream party groups that limits the top-up to EU-made steel, tying part of a carmaker's compliance to a European green-steel supply chain rather than low-carbon fuels.
For fund selectors with European auto exposure, corporate fleet targets are the concrete change: mandatory zero-emission share targets would become “aspirational” goals, so fleet buyers would no longer have to lift electric volumes. Small or highly efficient EVs would qualify for “super credits” that make the targets easier to meet. The proposals set out no penalties or enforcement mechanism, ESG News reported.
The European People's Party, Parliament's biggest group, said it had secured a major victory for the car industry by reversing the combustion engine ban. T&E, a transport and mobility campaign group, called the vote another step in the wrong direction, arguing that allowing biofuel-powered cars would divert investment from electrification and leave the EU auto sector less able to compete with China.
France and Germany want 90%
The full assembly is due to vote on the auto package in December, setting Parliament's position for negotiations with the Council, the grouping of EU governments, which is still deliberating. Last month France and Germany agreed the CO2 reduction should be 90%, with no need for compensatory measures, and have put the idea to other EU members.
Parliament's committee position counts a steel top-up that the Franco-German 90% does not require. The December vote decides which arithmetic Parliament carries into the talks with member states.
Reported by the Policy & Disclosure desk from ESG News. Published . Corrections