EU car and van makers demand action on CO2 rules

Europe’s car and van manufacturers are urging EU policymakers to provide clarity on CO2 regulations, warning that delays could harm the sector’s competitiveness, investment potential, and employment.

As the European Union’s ambitious CO2 tailpipe limits come into effect in 2025, the auto industry warns it faces steep challenges in meeting the targets without additional support and flexibility.

“Without a clear political statement by the European Commission by the end of 2024, the auto industry risks losing up to €16 billion in investment capacity,” said de Meo. The potential losses could arise from penalties, reduced production, pooling with foreign competitors, or selling electric vehicles at a loss.

Manufacturers are calling for a decisive response to align regulatory goals with market realities, particularly as electric vehicle (EV) sales stagnate at 13% of the market — far short of the 23% target needed to meet CO2 reduction requirements. The ACEA has warned that waiting for the Commission’s Strategic Dialogue on the automotive industry or the 2026 CO2 legislation review is not an option. “Manufacturers need clarity now to finalise compliance strategies, making pooling arrangements and other provisions for 2025,” de Meo stressed.

The ACEA highlighted several factors complicating the green transition:

• Supply chain constraints: Rising costs for manufacturing and materials.
• Infrastructure gaps: Slow growth of EV charging networks.
• Market dynamics: Declining subsidies for EV purchases and sluggish demand.
• Trade tensions: Heightened risks affecting cross-border commerce.

The ACEA noted that meeting tougher CO2 targets this time requires seamless interplay of factors beyond manufacturers’ direct control. Regulatory targets alone are insufficient — the market must drive the transition too.

The ACEA proposed measures such as phasing-in or multi-year average compliance to ease the burden on manufacturers. These approaches, already used for heavier vehicles like trucks and buses and in other regions with CO2 reduction mandates, would not alter the EU’s overall climate goals but would reflect market and industrial realities.

“In a well-working system, paying penalties should be the exception, not the default,” said de Meo. “Avoiding penalties should rest on sound economics, not inflict harm.”

Despite the challenges, the industry remains committed to the EU’s 2050 climate neutrality goals. ACEA members have pledged €250 billion towards the green mobility transition. However, they caution that the current trajectory risks undermining this commitment unless urgent adjustments are made.

The ACEA and European governments, including Germany, France, and Italy, are pushing for the European Commission to act decisively to ensure that the transition supports rather than hinders the automotive industry’s competitiveness and job security.