The European Commission has proposed extending the compliance period for automakers to meet CO2 emissions targets from one year to three, providing manufacturers with more flexibility while maintaining emissions reduction goals. The decision aims to support automakers struggling with slowing EV demand and global competition, balancing sustainability targets with industry challenges. 

The EU’s clean mobility regulations, introduced in 2023, mandate a 100% reduction in CO2 emissions from new cars and vans by 2035. Initially, automakers were required to meet incremental emissions targets annually starting in 2025. However, concerns over financial penalties and the transition to electric vehicles (EVs) led automakers to lobby for extended timelines. European Commission President Ursula von der Leyen emphasized that while emissions targets remain unchanged, the extension offers “breathing space” for automakers to scale production efficiently. 

Industry leaders, including Volkswagen and Renault, welcomed the move, calling it a pragmatic approach that allows manufacturers to adapt while ensuring supply chain stability. The EU is also considering additional measures, such as direct support for European battery producers and expanding “technology neutrality,” which could include e-fuels alongside EVs in its long-term decarbonization strategy. 

However, environmental groups and policymakers criticized the decision, arguing it could delay the mass adoption of EVs. Transport & Environment’s Executive Director William Todts warned that postponing stricter emissions rules undermines Europe’s competitiveness in the EV market, while consumer advocacy groups expressed concerns that the move could slow down the production of affordable electric vehicles. 

The proposal now awaits approval from EU governments and the European Parliament. If implemented, it will reshape the EU’s ESG policies in the automotive sector while influencing the bloc’s carbon neutral strategy. Automakers must now navigate evolving regulatory landscapes while accelerating their transition to cleaner mobility solutions. 

Sources: 

https://esgnews.com/eu-proposes-three-year-compliance-period-for-automakers-to-meet-co2-emission-targets/ 

https://www.reuters.com/business/autos-transportation/eu-propose-giving-automakers-three-years-meet-co2-emission-targets-2025-03-03/ 

https://www.reccessary.com/en/news/world-regulation/eu-to-offer-extended-compliance-period-for-car-manufacturers 

https://english.news.cn/20250303/1db8fbc4496a49d5be609179020b84c9/c.html