Brussels – At the Environment Council meeting on December 17th, France presented a case for maintaining stringent CO2 standards for cars and vans while avoiding measures that could financially burden European car manufacturers. The discussions underscored the need to support the automotive industry during its transition to meet these standards.
According to French officials, the European automotive sector is currently undergoing a significant transformation, requiring a rapid overhaul of its value chain. This process presents substantial risks that need to be managed effectively. The EU’s regulations, including the zero-emission target for cars and vans by 2035, are critical for the strategies of European Original Equipment Manufacturers (OEMs). However, France emphasised the importance of accompanying these targets with measures to preserve the sector’s economic activity and investment capacity.
In 2024, the global sales of electric vehicles (EVs) did not meet expected growth rates, exposing European carmakers to potential penalties under the 2025 targets. This situation is particularly challenging as the industry is already facing difficulties. European OEMs are exploring “pooling” options to mitigate these risks, but this could lead to financing investments by foreign manufacturers.
France noted that European carmakers and their subcontractors have invested billions of euros in developing a full range of European-made electric vehicles. Imposing penalties on these manufacturers, who have made significant investments in electrification, would be counterproductive. Therefore, France proposed a review of the potential penalties for 2025 as part of the 2026 review of the regulation on CO2 standards for cars and vans. This review should aim to ensure the viability of the transition to electric vehicles without compromising electrification objectives.
Circularity Requirements and End-of-Life Vehicle Management
During the same council meeting, member states discussed a proposal for a regulation on circularity requirements for vehicle design and the management of end-of-life vehicles (ELVs). The European Commission published this proposal on July 13, 2023, aiming to amend existing regulations and repeal directives related to ELV management.
The proposal, presented at the Working Party on the Environment (WPE) under the Spanish Presidency in October 2023, has seen substantial progress under the Belgian Presidency in the first half of 2024. Discussions have focused on defining ELVs, distinguishing between used vehicles and ELVs, and addressing the collection, treatment, and export regime of ELVs. The results of these discussions have been recorded in a partial Presidency compromise text presented to the Environment Council in June 2024.
The Hungarian Presidency has continued these efforts, dedicating six WPE meetings to the proposal. Member states have shown increasing attention to the impacts on the competitiveness of the EU’s automotive industry, a trend likely to mark the current legislative cycle.
Significant discussion time has been devoted to increasing the ambition regarding heavy-duty vehicles (HDVs) and two- or three-wheel vehicles and quadricycles. This includes new obligations initially foreseen only for passenger cars and light commercial vans, such as design enabling the removal of certain parts and the establishment of a circularity strategy. The extended producer responsibility (EPR) regime for HDVs and motorcycles would also cover the costs of the treatment chain, as is already the case for passenger cars and light commercial vans.
The proposal’s environmental ambition was reflected in the question of minimum recycled content. While some member states support the 25% recycled content target for plastics in passenger cars and light commercial vans, others warn of potential market distortions due to a shortage of recycled material. The recently finalised Packaging Regulation’s ambitious recycling targets might ensure sufficient recycled material availability.
Member states have also discussed setting a quantified target for minimum recycled steel content upon the proposal’s entry into force rather than waiting for a future feasibility study. This topic requires further guidance from the Council to define a baseline target that delegations could agree on, possibly combined with a review clause.
Thorough discussions have taken place regarding the scope of parts and components that must be designed for easy dismantling from ELVs. While some member states support the Commission’s proposed list or suggest additional components, others argue that only parts with genuine reuse market interest should be covered.
Taken together, the Environment Council dedicated significant time to the automotive industry, an industry which is undoubtedly of significant national importance to key EU member states but which is, due to environmental regulations, stiff competition, and dampened consumer demand, going through a contentious transition.
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