EU environment ministers on 25 June 2026 debated revisions to CO2 emission standards for cars and vans, exposing deep divisions over electrification versus technology neutrality, the 2035 target, and the role of renewable fuels. Cyprus presented a progress report on the file, which aims to update the current regulation. No decision was taken; further work is expected under the incoming Irish presidency, with a general approach targeted for December 2026.
Nine member states — Sweden, Spain, France, Portugal, Luxembourg, Netherlands, Denmark, Greece, and Lithuania — defended electrification and the 2035 zero-emission target for new cars. They argued that the target provides regulatory certainty for investment in electric vehicles and charging infrastructure. In contrast, Czechia, Italy, Poland, Slovakia, Bulgaria, Latvia, and Romania pushed for technology neutrality and reopening the 2035 target, citing concerns over industrial competitiveness and the need for alternative fuels such as e-fuels and biofuels.
On compliance flexibilities, Sweden, Portugal, Luxembourg, Netherlands, Malta, Finland, and Lithuania accepted only limited mechanisms, warning that broad flexibilities could weaken the environmental ambition. Czechia, Poland, Slovakia, Germany, Estonia, and Romania sought expanded compliance tools, including credits for renewable fuels and off-cycle emissions reductions.
The question of renewable fuels split delegations sharply. Sweden, France, Luxembourg, Netherlands, Denmark, Finland, and Malta opposed redefining zero-emission vehicles to include those running on renewable fuels, arguing that this would undermine the shift to battery electric powertrains. Czechia, Italy, Poland, Slovakia, Bulgaria, Latvia, Germany, and Austria supported recognition of renewable fuels as a compliance pathway, stressing the need for a technology-open approach.
On the utility factor — which adjusts plug-in hybrid emissions based on real-world driving — Sweden, Luxembourg, Netherlands, and Denmark backed updates to reflect actual usage, while Czechia, Slovakia, and Germany opposed changes, warning of additional compliance costs.
Broad support emerged for 'made in Europe' conditions and green steel credits, with France, Poland, Croatia, Romania, and the European Commission backing them to strengthen EU industrial competitiveness and reduce carbon leakage. Czechia and Germany raised concerns about potential trade distortions and administrative burden.
All delegations agreed on the need for decarbonisation, competitiveness, and regulatory predictability, but diverged on the pace and technological pathway. The outcome will affect automakers facing investment decisions, battery and steel industries seeking demand certainty, charging infrastructure providers relying on EV uptake, and consumers concerned about vehicle affordability and fuel choice.
Automakers face diverging regulatory signals — a clear 2035 target favours electrification investments, while technology neutrality could preserve internal combustion engine supply chains. Battery and steel industries benefit from 'made in Europe' provisions but face uncertainty if targets are softened. Charging infrastructure providers rely on a strong EV mandate to justify network expansion. Consumers may see lower costs if flexibilities allow continued use of combustion engines, but risk higher total cost of ownership if electrification is delayed.