France and Germany want to soften incineration output

Germany and France have reached an agreement to soften the planned phase-out of internal combustion engine vehicles in the European Union, allowing new gasoline and diesel cars to continue being sold beyond 2035 under certain conditions. The two countries announced the deal on Friday after weeks of negotiations, aiming to address concerns raised by the automotive industry and avoid a deadlock in EU legislative processes. The agreement outlines a compromise that reduces the required average emissions cuts for car manufacturers by 90 percent by 2035, without requiring them to fully compensate for the remaining 10 percent through carbon-neutral fuels or green steel. This flexibility would allow automakers to continue selling new internal combustion engines as long as their overall fleet meets the established emission limits. Previously, the European Commission had proposed that all remaining emissions must be offset using these alternative methods. The deal comes amid growing pressure from Germany, which has strongly advocated for delaying the ban on combustion engines. France initially opposed any relaxation of the phase-out but has since shifted its position, recognizing the need for a unified approach among major EU economies. The agreement could help secure a majority in the Council of EU member states, facilitating broader approval of the revised regulations. In return for this concession, Germany has agreed to support stricter adherence to the principle of “made in Europe” within industrial subsidies. This means that companies receiving public funding would be required to source components from within the EU or specific partner countries. While Germany previously pushed for a broader inclusion of trade partners, it has now accepted a more restrictive interpretation of the policy. The European Commission had originally proposed phasing out internal combustion engines by 2035, a move supported by several EU nations. However, France and six other countries had resisted this plan, warning against a strategic misstep. The new German-French proposal appears to offer additional flexibility compared to the initial EU-wide plan. Critics argue that the agreement risks undermining climate goals and slowing the transition to electric vehicles. The transport organization T&E Germany warned that the deal could seal the decline of the European automobile industry, emphasizing the need to reduce oil dependence, ensure affordable electric vehicles, and provide clear incentives for investment in electric mobility and supply chains. European Parliament member Michael Bloss, representing the Greens, described the agreement as a brake on the rapid growth of electric vehicles. He stressed that the future of the auto industry depends on building high-quality, affordable electric vehicles in Europe. Meanwhile, Finance Minister Lars Klingbeil highlighted discussions around protective measures against Chinese competition and incentives for purchasing electric vehicles produced by European manufacturers. He noted that the package includes provisions aimed at improving the business environment for European automakers, including commitments for job security and site investments. French President Emmanuel Macron and German Chancellor Friedrich Merz reportedly aim to further relax the ban on combustion engines than previously planned. Their initiative reflects efforts to strengthen the European automotive sector while navigating complex regulatory challenges. The agreement marks a significant shift in EU environmental policy, balancing economic interests with climate objectives. It underscores the ongoing debate over how best to manage the transition away from fossil fuel-based transportation while safeguarding jobs and industrial competitiveness.