EU environment ministers on 25 June 2026 failed to bridge deep divisions over post-2025 CO2 emission standards for cars and vans, as a progress report from the Cypriot presidency exposed incompatible positions on the 2035 zero-emission target, technology neutrality, and compliance flexibilities. Nine member states — Sweden, Spain, France, Portugal, Luxembourg, Netherlands, Denmark, Greece, and Lithuania — defended the existing 2035 phase-out of internal combustion engines and a clear electrification pathway. A counter-bloc of seven — Czechia, Italy, Poland, Slovakia, Bulgaria, Latvia, and Romania — demanded the target be reopened and that all low-carbon technologies, including renewable fuels and hybrids, be recognised as zero-emission.
The debate, the first major ministerial discussion since the 2023 adoption of the current regulation, revealed a second cleavage on compliance flexibilities. Sweden, Portugal, Luxembourg, Netherlands, Malta, Finland, and Lithuania accepted only limited mechanisms, warning that broad flexibilities would undermine the regulatory signal. Czechia, Poland, Slovakia, Germany, Estonia, and Romania pushed for expanded tools, including multi-year averaging and credit trading, to lower compliance costs for manufacturers. On renewable fuels, Sweden, France, Luxembourg, Netherlands, Denmark, Finland, and Malta opposed redefining zero-emission vehicles to include e-fuels or biofuels, arguing this would weaken the electric-vehicle mandate. Czechia, Italy, Poland, Slovakia, Bulgaria, Latvia, Germany, and Austria supported such recognition, insisting on technology neutrality.
The utility factor — the ratio of real-world electric driving to rated range for plug-in hybrids — also split delegations. Sweden, Luxembourg, Netherlands, and Denmark backed updating the factor to reflect actual usage, which would reduce the compliance value of plug-in hybrids. Czechia, Slovakia, and Germany opposed changes, citing investment certainty. A rare area of broad agreement emerged on 'made in Europe' conditions and green steel credits: France, Poland, Croatia, Romania, and the European Commission supported linking regulatory benefits to local battery and steel production, while Czechia and Germany raised WTO compatibility and cost concerns.
All delegations converged on the need for decarbonisation, competitiveness, and regulatory predictability. Ministers tasked the incoming Irish presidency with continuing technical work, aiming for a general approach in December 2026. The outcome will directly affect automakers facing investment decisions, battery and steel producers eyeing demand, charging infrastructure providers reliant on EV uptake, and consumers concerned about vehicle affordability. The cleavage pits industrial incumbents favouring a multi-technology transition against first-mover economies betting on electrification as the dominant pathway.