Germany and France agree on easing the ban on combustion engines

Germany and France have agreed on a common position that includes a move away from the so-called phase-out of combustion engines by 2035. The "comprehensive package" to "secure the future of the European automotive industry" combines the "ambitious European decarbonization path with the necessary regulatory flexibility," said a joint statement.

The agreement could enable a majority in the Council of EU states to soften the decision to phase out combustion engines. The EU Commission proposed last December that cars with internal combustion engines would be allowed to be registered in the EU after 2035 - a departure from the end of combustion engines that was actually negotiated. Germany and the car industry were committed to this.

The European Parliament and the Council of the EU Member States are currently discussing the EU Commission's proposal. It will not come into force without the consent of both institutions. France and six other EU countries opposed easing restrictions in June and warned of a strategic mistake. Together they have the necessary votes to block a decision.

The German-French compromise now stipulates, among other things, that manufacturers would only have to reduce their average emissions by 90 percent from 2035 without having to compensate for the remaining 10 percent. The EU Commission had suggested that the remaining 10 percent must be completely offset by CO2-neutral fuels or green steel. The German-French proposal gives manufacturers even more flexibility.

This would allow them to continue selling new petrol and diesel vehicles as long as their new car fleet complies with the prescribed limit. If local green steel and aluminum are used, this should also be credited particularly favorably to the CO2 values ​​of the manufacturer's fleet.

Conversely, Germany is making concessions to France when it comes to industrial support. In the future, government subsidies for cars should generally be limited to vehicles manufactured in the EU member states, Great Britain and other countries in the European Economic Area. This means that government purchase bonuses could also be used for British cars, for example.

Germany had previously advocated for a softer regulation that would include suppliers from more trading partners - such as Turkey and Morocco, where many car manufacturers produce.

Chancellor Friedrich Merz (CDU) wrote on Platform X about an investment signal to industry and a good day “for drivers and for jobs in Germany, France and Europe.”

Federal Environment Minister Carsten Schneider (SPD) said: "Electric cars will definitely prevail because they are technically superior and you can save a lot of money when driving." The goal is for them to be built in Europe and not just in China. Among other things, he referred to the incentives for building cars with climate-friendly green steel in the future. "The clear expectation of German companies is that they use the new opportunities for investments and job guarantees here in Germany."