Environmentalists against Merz-Macron deal: the two from yesterday

Germany and France have reportedly reached an agreement on relaxing the phase-out of internal combustion engine vehicles in new cars. Chancellor Friedrich Merz (CDU) and French President Emmanuel Macron aim to loosen the fleet emissions limit more than previously planned, according to a report by Handelsblatt. This would allow the sale of new gasoline and diesel vehicles in the EU for the first time after 2034. In exchange, Germany has agreed to concessions regarding the preference for products made in European countries within industrial subsidies. According to a four-page position paper, this deal has not yet been finalized by the German government. Previously, France had opposed loosening the fleet emissions limit. A consensus between these two major European economies could help secure a majority in the EU Council of member states. The EU Commission proposed in December 2025 that new internal combustion engine vehicles could still be registered in the EU after 2034. However, the overall goal of achieving climate-neutral transport remains unchanged. If implemented, manufacturers could continue selling new internal combustion engines after 2035, though the allowed share would be small and would need to be offset through green fuels and renewable steel. Whether manufacturers will make extensive use of this flexibility remains uncertain. The approach remains technology-neutral: how manufacturers meet the fleet emissions limit is left to them. Currently, battery-electric propulsion is considered the cheapest option. The German government has long advocated for softening the regulation. Currently, the European Parliament and the EU Council are discussing the proposals. Without approval from both institutions, the proposals will not take effect. France and six other EU countries had opposed relaxation earlier this year, warning against a strategic error. The German-French compromise proposal, according to Handelsblatt, would require manufacturers to reduce average emissions by only 90 percent by 2035, without needing to compensate for the remaining 10 percent. This would allow continued sales of gasoline and diesel vehicles as long as their new car fleet meets the required emission limits. However, expectations of widespread continuation of internal combustion engines are low, given the likely limited market share. This would lack economies of scale necessary for cost-effective production. Germany, in turn, agrees to restrict state funding to vehicles produced in the 27 EU member states. Great Britain could also be included, allowing state purchase incentives to apply to British models. Germany had previously supported a less restrictive rule that would include suppliers from more trade partners. The transportation association T&E Germany warned of a "historic mistake." Mobility spokesperson Susanne Goetz criticized: "German and French politicians claim to want to save jobs, but this deal could ultimately seal the decline of the European automotive industry." Europe must reduce its dependence on imported oil, provide affordable electric vehicles, and give the industry clear incentives to invest in electric vehicles and their supply chains. European Parliament member Michael Bloss, lead negotiator for the Greens' faction on CO₂ fleet limits, called France and Germany have moved closer to an agreement on the future of internal combustion engines, which would mean a further relaxation of the planned ban on new vehicles with such engines by 2035. Chancellor Merz and President Macron reportedly sealed a deal at the EU summit, according to Handelsblatt. Earlier this week, the heads of automobile companies directly presented their wishes to French President Macron ahead of the Paris Motor Show. On Monday, Macron met with them again on-site. Although Macron stated it would be "a matter of hours" before the final agreement between Paris and Berlin was reached, it took until the start of the EU summit. By Thursday evening, several versions of the agreement were circulating in Brussels, although the basic principles were already known. In Berlin, however, it was emphasized that the agreement had not yet been officially decided. Both sides gain something from the "Automotive Package": Germany pushes for a stronger relaxation of the internal combustion engine phase-out and accepts stricter industrial policy conditions regarding the preference for European suppliers in funding and public tenders. An official agreement is still pending, according to the Chancellery. On pressure from the Berlin government, the EU's CO₂ fleet limits for new cars should be adjusted to allow an additional ten percentage point relaxation. Originally, the EU Commission had proposed that emissions must decrease by 90 percent by 2035, with the remaining ten percent fully compensated by carbon-neutral fuels or green steel. This obligation will fall away under the German-French understanding. Thus, automakers get significantly more leeway, hoping that many new internal combustion engine vehicles can be sold even after 2035. From Parisian government circles, it was noted that Berlin could be slightly accommodated here because the trend towards electromobility is already underway. In Paris, recent registration figures in Europe question whether there will still be much interest in internal combustion engines after 2035. One-third of the vehicles registered in Europe in September are electric. Berlin also pushed for the demand that, unlike what the EU Commission wanted, the member states will not be obliged to advance the electrification of large company fleets through binding quotas. Quotas for production in Europe In return, Macron succeeded in pushing for stricter "Made in EU" requirements. State purchase incentives, public orders, and support for leasing will only be available for vehicles manufactured in Europe starting in 2028. For the initial years, the following applies: "The vehicle must be assembled in Europe, with at least 70 percent of the total value creation, based on components, excluding batteries, being achieved in Europe," says the document. From 2032 onwards, the requirements will be tightened. German-French initiative: The EU is to receive a new "deterrence weapon" for trade conflicts. For a long time, Germany resisted, but now it is determined to stand firmer in the trade dispute with China. Political disputes mainly revolved around the question of what "Made in Europe" exactly means and how to deal with the EU’s free trade partners. According to the compromise, this definition now includes the EU-27 and the possibility of an opt-in to include European partners who became part of the EU internal market on January 1, 2020, "subject to an agreement on full reciprocity." To protect supply chains, Great Britain was included in the regulation, and British vehicles and components are regarded as "manufactured in the EU." However, Great Britain would only qualify if it introduces comparable "Made in" criteria itself. Trade partners such as Canada, Japan, and South Korea, as well as neighboring countries of the EU such as Morocco or Turkey, are excluded. The share of parts and batteries from European production should gradually increase. The "Made in EU" rules apply to purchase incentives and public contracts. Federal Environment Minister Carsten Schneider (SPD) blocked the final agreement on Thursday evening but could only change details in the end. "Electric vehicles will prevail anyway because they are technically superior and you can save money while driving," he emphasized on Friday. The decisive question now is where these vehicles will be built in the future. "Our goal is that they are built in Europe and not just in China," Schneider added. The deal is a swap. France gives up its resistance to relaxing the internal combustion engine phase-out. Germany moves toward France on "Made in EU" regulations. The federal government has previously advocated for an as open as possible approach that includes manufacturers from partner countries such as Canada or Japan. Intensive negotiations The Chancellery and the Élysée Palace have negotiated intensively over the past weeks, as the F.A.Z. reported beforehand. The debate over relaxing the internal combustion engine phase-out had previously been blocked in Brussels. The European Commission had proposed last year to lower the carbon dioxide reduction target for new cars in 2035 from 100 percent to 90 percent. In return, the commission's proposal requires the use of green steel; internal combustion engine vehicles must also be fueled with renewable fuels. This went too far for Germany. France had previously led a group of seven EU states opposing strong relaxation. The seven states together had the necessary votes to block a decision. With the German-French agreement, the path is now clear. Germany and France also want to create a new category of vehicles that can only be fueled with renewable fuels or fuels with low carbon dioxide emissions. Manufacturers no longer have to achieve their carbon dioxide targets annually but on average for the years 2029 to 2031. The document falls behind the wishes of the automotive industry. It had demanded a five-year average from 2028 to 2032. A concession to the industry is that plug-in hybrids will be credited with a bonus on carbon dioxide targets until early 2030. The SPD European parliamentarian Tiemo Wölken criticized the draft. He said it endangered the achievement of climate goals.