“Comprehensive” car package: Berlin and Paris agree to phase out combustion engines

Chancellor Merz and French President Macron agree on a car package. Accordingly, they don’t just want stricter “Made in Europe” rules. It is also about moving away from the combustion engine.

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. This emerges from a joint position paper that was confirmed by both sides. 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 EU's two largest economies are thus resolving a dispute that threatened to block two legislative processes in Brussels.

The move away from combustion engines was the federal government's main demand. It's about the so-called fleet limits, with which the EU determines how much carbon dioxide a manufacturer's new cars can emit on average per year. According to the current status, they will fall to zero in 2035. The EU Commission has already proposed not reducing the limit values ​​to zero, but only by 90 percent compared to 2021. The remaining emissions should be offset elsewhere.

The implementation of the German-French agreement would lead to more combustion engines being sold after 2035. Manufacturers would have to further reduce their CO2 emissions by 90 percent by 2035, but unlike the Commission proposal, they would not have to offset the remaining ten percent. That would mean that combustion engines won't disappear from the new car market until 2035.

Berlin approves “made in Europe”

In return, Berlin approved a stricter view of the “Made in Europe” principle. Companies in sectors considered strategic will be obliged to supply themselves with components manufactured in the EU or certain partner countries if they receive public money. Germany had long advocated for “Made in Europe” to include a significantly larger number of partner countries.

The agreement between the EU's two largest economies should now enable Brussels to make progress on both laws. The 27 member states could agree on a position by December. This is followed by negotiations with the European Parliament, where opinions between the groups are still far apart.

Chancellor Friedrich Merz wrote on French President Emmanuel Macron also said on