The European Commission has announced proposals to give struggling carmakers more time to meet CO2 targets to avoid fines.

The EU said the proposal would give more breathing space for industry and more clarity, without changing the agreed targets

European Commission President Ursula von der Leyen said the bloc could add a three-year flexibility for carmakers to comply with the 2025 CO2 limit. This would allow them to not meet targets this year or 2026, as long as they overperform in 2027 to ensure a compliant average. The agreed targets will stay the same.

Von der Leyen said: “Instead of annual compliance, companies will get three years – this is the principle of banking and borrowing; the targets stay the same; they have to fulfil the targets. It means more breathing space for industry and more clarity, and without changing the agreed targets.”

The proposals will be presented in an Action Plan this Wednesday 5 March to help carmakers concerned about targets; Von der Leyen said she was sure that such a targeted amendment could be agreed swiftly by the European Parliament and the Council.

She also called for European car supply chains to be more robust and more resilient, especially when it comes to batteries.

“Because while our own production is in the process of scaling up, we see that imported batteries are cheaper. We cannot let EVs become more expensive. But we also cannot afford to create new dependencies. So, we will explore direct support for EU battery producers. We will gradually introduce European content requirements for battery cells and components. And of course, we will keep cutting red tape. Regulatory simplification will continue.”

Von der Leyen also said the Commission had agreed the EU needs a big push in software and hardware for autonomous driving.

ACEA, the European Automobile Manufacturers’ Association, said proposed penalty relief for 2025 targets for cars and vans was a first step in the right direction, and more support for autonomous vehicles and European battery supply chain were also “positive signs”.

But campaign group Transport & Environment said that weakening the EU clean car rules “rewards laggards and does little for Europe’s car industry except to leave it further behind China on electric vehicles”.

William Todts, executive director of the clean transport advocacy group, went on: “The EU risks creating very damaging uncertainty about the electric vehicle transition in Europe. So, we expect an automotive action plan that restores confidence and puts Europe and its industry back on track towards 100% emission-free cars in 2035.”

And E-Mobility Europe, a trade association uniting the entire European e-mobility ecosystem, denounced the Commission’s proposal, saying it would significantly delay Europe’s electric vehicle rollout across the next two years, risking around half a million fewer electric cars entering the EU market in 2025.

Chris Heron, secretary general, E-Mobility Europe, went on: “That uncertainty is bad news for investors in EU charging infrastructure, battery production and e-mobility overall.

“We have big legal questions now. Changing the rules midway through 2025 is unfair for the automakers that worked to comply with the law in good faith.

“Europe slowing down its electric vehicle transition will leave the door wide open for China to continue as undisputed market leader, putting long-term job creation at risk.”

The UK is also looking at giving carmakers increased flexibility on meeting targets under its ZEV mandate EV sales quotas that came into effect from 2024. A consultation ran from the end of 2024 to mid-February, looking at how the current arrangements and flexibilities are working and what steps can be taken to support domestic manufacturing and “cement the UK’s position as one of the major European markets for zero-emission vehicles (ZEVs)”.