Headlines:
- EPP pushes renewable fuel pathway in opening clash over EU car CO₂ rules
- French new car prices decline for first time since 2019 as EV price gap narrows
- T&E warns most EU tax systems fail to incentivise company fleet electrification
- ICCT warns gap between official and real-world vehicle emissions continues to widen
- Cycling industry urges member states to use bicycles to cut fuel dependence
- UK government brings Govia Thameslink Railway into public ownership as rail reform programme advances
- New EU transport emissions accounting framework enters into force
- InfluenceMap links US auto industry’s regulatory lobbying to EV investment uncertainty
- European Sleeper to extend Milan night train into Netherlands from December
EPP pushes renewable fuel pathway in opening clash over EU car CO₂ rules
The European Parliament’s review of the EU’s car and van CO₂ standards opened this week with a sharp political divide emerging over the future of the 2035 zero-emission target, as the European People’s Party proposed recognising vehicles powered exclusively by renewable fuels as zero-emission vehicles.
Presenting his draft report to the Parliament’s Environment Committee on June 2nd, rapporteur Massimiliano Salini argued that the existing framework relies on a “tailpipe approach” that fails to account for lifecycle emissions. He proposed creating a new category of vehicles running exclusively on alternative fuels that would be treated as equivalent to battery electric vehicles under the regulation.
Salini also proposed introducing renewable fuel credits as a compliance flexibility, extending the compliance assessment period from three to five years and reducing the 2030 interim CO₂ reduction target for vans from 40% to 30%.
The intervention marks the first major parliamentary attempt to reshape the practical operation of the EU’s 2035 vehicle decarbonisation framework since its adoption in 2023.
The debate exposed a growing divide not only between political groups, but also over how the EU should balance industrial competitiveness, energy security and climate objectives.
S&D MEP Thomas Pellerin-Carlin defended the electrification pathway, arguing that geopolitical developments had strengthened rather than weakened the rationale behind the existing framework. Referring to tensions in the Middle East and Europe’s continued dependence on imported oil, he said the EU produces only around 3% of the oil it consumes while generating its own electricity domestically. He warned against creating regulatory uncertainty for manufacturers that had already invested heavily in electrification and called for maintaining a stable framework for investment.
Renew Europe also criticised the proposal. MEP Sigrid Friis said the report went well beyond the short-term flexibilities adopted earlier this year and introduced excessive loopholes into the framework. While acknowledging the challenges facing Europe’s automotive industry, she argued that carmakers required regulatory certainty rather than new signals and warned that delaying the transition would not improve industrial competitiveness.
The Greens echoed those concerns. MEP Michael Bloss argued that market developments were already moving faster than political discussions in Parliament and warned against creating incentives that could divert investment away from advanced vehicle technologies. He also questioned the continued role of plug-in hybrid vehicles, citing concerns about their real-world emissions performance.
On the right of the political spectrum, support for Salini’s approach was broad. ECR MEP Alexandr Vondra welcomed the report as a move towards greater technological neutrality and argued that Europe should focus on competition and innovation rather than penalties. ESN MEP Anja Arndt questioned why vehicles using renewable electricity could be considered zero-emission while vehicles using alternative fuels remained excluded, renewing calls for a lifecycle emissions methodology.
The debate also highlighted an emerging disagreement over industrial policy. S&D MEP Tiemo Wölken argued that Salini’s proposed system would prioritise renewable fuel credits over incentives for low-carbon steel production, warning that support mechanisms should benefit European industrial decarbonisation rather than fuel suppliers.
Several EPP members defended the proposal as a necessary correction to what they described as shortcomings in the existing legislation. Peter Liese said the group’s objective remained the removal of the effective ban on combustion engines while maintaining climate objectives through the inclusion of renewable fuels and industrial decarbonisation measures.
Concluding the debate, Salini acknowledged that negotiations would be difficult and said Parliament would need to develop compromise solutions capable of attracting broad support across political groups.
The Environment Committee is expected to continue work on the file over the coming months before establishing Parliament’s negotiating position on the Commission’s review of the vehicle CO₂ standards framework.
French new car prices decline for first time since 2019 as EV price gap narrows
The average price of a new passenger car sold in France fell by 2% in 2025 to €34,600, marking the first annual decline since 2019 and ending five consecutive years of price increases, according to a new report from the Institut Mobilités en Transition (IMT).
The study found that average new car prices remain 29% higher than in 2019, exceeding both inflation and growth in household living standards over the same period. However, the decline in 2025 reflects a reduction in plug-in hybrid sales, a modest shift towards smaller vehicles and new pricing strategies adopted by manufacturers seeking to recover lost volumes.
Electric vehicles accounted for 20% of new passenger car registrations in 2025, while conventional hybrids reached 43% of the market, becoming the dominant powertrain. IMT said the price differential between electric and combustion vehicles continued to narrow, falling to €5,200 in the B-segment and €2,900 in the C-segment. With existing purchase incentives, the report said effective price parity has now been reached in both segments.
The report argues that electrification was not the principal driver of vehicle price inflation. Of the 29% increase in average vehicle prices since 2019, electrification accounted for 13 percentage points, while manufacturer pricing and product strategies contributed nine percentage points and wider inflationary pressures six percentage points.
New car affordability remains a challenge. The share of purchases made by the lowest-income 40% of households fell from 24% in 2019 to 15% in 2025, while the wealthiest 10% increased their share from 22% to 30%. IMT said targeted measures such as social leasing and purchase incentives helped partially reverse the trend by improving access to electric vehicles for lower-income households.
The report also found that 77% of new vehicles sold in France in 2025 were manufactured within the European Union. French-built vehicles represented 15% of overall sales, but 27% of electric vehicle sales, compared with 11% for combustion models.
T&E warns most EU tax systems fail to incentivise company fleet electrification
Only nine EU member states have tax systems that clearly incentivise companies to choose electric vehicles, while 18 fail to provide a meaningful signal in favour of electrification, according to a new analysis published by Transport & Environment (T&E).
The environmental group said the findings highlight significant disparities in company car taxation across Europe at a time when corporate fleets account for around 60% of all new vehicle registrations and play a central role in shaping the second-hand vehicle market.
According to the study, 12 member states provide no meaningful tax incentive for electric company cars. Several of the EU’s largest automotive markets, including Germany, Spain, Italy and Poland, fall into this category. T&E estimates that 68% of all corporate compact car registrations occur in countries where tax systems fail to provide a clear incentive to choose electric vehicles.
The analysis compares the tax advantage available to a company purchasing a battery electric vehicle with the additional upfront cost of an equivalent electric model. Countries identified as providing the strongest incentives include Belgium, France, the Netherlands, Denmark, Portugal, Slovenia and Greece.
T&E argues that national tax policy has emerged as a key determinant of corporate fleet electrification. Belgium’s corporate EV share increased from 8.8% in 2021 to 54.2% in 2025 after restricting favourable depreciation rules to electric vehicles, while France’s corporate EV market share reached 41.3% in March 2026 following a series of tax reforms.
The report also criticises the treatment of combustion engine company cars in several member states. According to T&E, some tax systems continue to provide substantial fiscal advantages for petrol vehicles through depreciation allowances, VAT deductions and company car tax arrangements.
Germany was identified as a particular outlier. The study argues that larger and more polluting petrol company cars often receive greater tax advantages than smaller vehicles, resulting in what T&E describes as an effective subsidy for higher fuel consumption. Germany and Poland together account for more than half of all corporate registrations of larger D-segment petrol vehicles examined in the study.
The analysis warns that tax treatment of company cars will have long-term implications for vehicle fleet decarbonisation. T&E estimates that approximately 20 million new internal combustion engine company cars will be registered across Europe before 2030. Many of these vehicles will subsequently enter the second-hand market, influencing fuel consumption and emissions for years after their initial registration.
The findings come as EU institutions begin examining the proposed Clean Corporate Vehicles Regulation, published by the European Commission in December 2025. The proposal would establish national targets for the electrification of vehicles registered by large companies.
T&E said the results demonstrate the need for EU intervention, arguing that voluntary national tax reforms have produced highly uneven outcomes across member states. The organisation contends that the proposed regulation could encourage governments to reform company car taxation, reduce oil dependence and strengthen demand for European-made electric vehicles.
The report concludes that differences in corporate fleet electrification are driven primarily by policy design rather than economic development or market size, pointing to Portugal and Slovenia as examples of smaller member states that have achieved significantly higher electric vehicle uptake through targeted tax measures.
ICCT warns gap between official and real-world vehicle emissions continues to widen
The gap between official vehicle emissions figures and real-world performance continued to widen between 2021 and 2023, with plug-in hybrid vehicles showing the largest divergence, according to new analysis by the International Council on Clean Transportation (ICCT).
Using on-board fuel consumption monitoring (OBFCM) data from approximately eight million passenger cars registered between 2021 and 2023, the study found that real-world emissions from conventional vehicles, including hybrids and mild hybrids, were on average 19% higher than official WLTP values in 2023, up from 18% in 2021.
For plug-in hybrid vehicles, the discrepancy was substantially larger. The ICCT found that average real-world emissions were around five times higher than official WLTP values in 2023, reflecting a growing gap between laboratory assumptions and real-world driving behaviour.
According to the report, the divergence is primarily linked to the extent to which plug-in hybrids are driven electrically in practice compared with assumptions embedded in the type approval framework.
The findings raise questions about the effectiveness of existing vehicle CO₂ standards, which are based on official emissions values. While official fleet-average emissions fell by 28% between 2018 and 2023, the ICCT estimates that real-world emissions declined by only 15% over the same period. Improvements were driven largely by the growing share of battery electric vehicles rather than reductions from vehicles equipped with combustion engines.
The report comes as the European Parliament begins examining proposed changes to the EU’s car and van CO₂ standards framework. During this week’s Environment Committee debate, several political groups called for greater recognition of lifecycle emissions and alternative fuel pathways, while others argued that maintaining regulatory certainty around vehicle electrification remains essential.
The ICCT called for regular revisions to the plug-in hybrid utility factor used in vehicle testing and urged the Commission to implement a correction mechanism under the CO₂ standards framework to account for the growing gap between official and real-world emissions performance.
