Germany and France are making a joint push to solidify the phasing out of internal combustion engine (ICE) vehicles. According to reports in the “Frankfurter Allgemeine Zeitung”, Chancellor Friedrich Merz (CDU) and President Emmanuel Macron plan to submit a joint policy paper ahead of the EU summit later this week. This paper is expected to demand strict Made-in-EU requirements for electric vehicles.
The proposal outlines a significant exchange: according to the report, President Macron is standing firm against any softening of the ICE ban. In return, Merz is willing to accept strict Made-in-EU regulations. Currently, the German government favors a highly flexible ruling that largely treats suppliers from partner countries, such as the UK and Canada, equally to EU suppliers. Conversely, France is pushing for a tight interpretation that significantly favors companies based within the EU.
Diplomats report that the specifics of this agreement are still being hammered out, with intensive negotiations taking place between the Chancellery and the Élysée Palace. Although a deal before the summit seems probable, Macron is said to be pushing for concessions on the origin rules that extend beyond the automotive sector itself.
These Made-in-EU requirements are part of the European Commission’s proposed Industry Accelerator Law, which also applies to energy-intensive industries and renewable energy technologies.
Current regulations permit all new vehicles registered in the EU to have an average CO2 emission of 93.6 grams per kilometer. Under the existing plans, this limit is slated to gradually drop to zero grams per kilometer. This effectively prevents the sale of new ICE vehicles starting in 2035, since alternative fuels, plug-in hybrids, and range extenders cannot achieve zero CO2 emissions.
Last year, the European Commission proposed lowering the CO2 reduction target for new cars in 2035 to 90 percent compared to 2021. However, this proposal requires the use of greener steel and mandate that combustion engines be run on alternative fuels.
The German government argues this requirement goes too far. France is leading a group of seven EU states, including Spain and the Netherlands, that are resisting severe softening of the rules. These seven countries collectively hold enough votes to enact a blocking minority.
