Leaked car industry paper: carmakers’ EU demands would cut EV sales in half

The car industry is demanding loopholes in the EU car CO₂ law that would halve the bloc’s ambition of selling only zero-emission cars in 2035. That’s according to T&E analysis of a leaked position paper by the European car industry lobby ACEA. Carmakers are demanding more than 10 loopholes, including counting cars that run on alternative fuels as zero emissions. It also wants the EU to halt its efforts to properly count the pollution of plug-in hybrid cars.

The EU is under pressure from carmakers to weaken its car CO₂ targets when it reviews the legislation this year. According to the ACEA paper seen by T&E, cars running on so-called carbon neutral fuels – possibly biofuels or e-fuels – would be counted as emitting 0 grams of CO₂ per km. This loophole alone would cut the share of EV sales by 25% in 2035 as manufacturers could continue selling high volumes of highly polluting combustion engine cars.

Lucien Mathieu, cars director at T&E, said: “This position is a disgrace. It will completely undermine the investment certainty needed for Europe to catch up in the EV race. Turning the EU's most important automotive regulation into a Swiss cheese will not restore the industry's competitiveness. It is a cynical attempt to dismantle a central pillar of Europe’s climate law. If the Commission capitulates to these demands, it will only hand a further competitive advantage to Chinese automakers.”

ACEA’s demand to cancel the 2027 ‘utility factor’ for plug-in hybrids would reduce electric car sales by 10%. Giving carmakers CO₂ credits for scrapping old cars would reduce the ambition by a further 6%. Credits for CO₂ reductions in car production and the use of certain technologies would reduce EV sales by 6%. Counting small EVs as more than one EV sale – with extra credit if made in Europe – would reduce ambition by 1%. Together the loopholes demanded by ACEA mean carmakers would just have to achieve a 52% EV market share in 2035.

ACEA’s list of demands comes as the EU Commission is under pressure from carmakers to speed up its review of the EU car CO₂ law. Commission president Ursula von der Leyen has said that a legislative proposal will be published by the end of 2025.

Lucien Mathieu said: “Carmakers are, on the one hand, calling for a drastic acceleration of the review and, on the other, don’t have a clue about what they want. They ask for a shopping list of flexibilities and loopholes, but don't allow any time for proper evaluation of these options. They want to go faster, but they don't even know in what direction and don't want people to have the time to even think about it. This is a recipe for disaster.”

Notes:

T&E analysed the demands contained in ACEA’s paper. The analysis is based on high exploitation of each flexibility.

Methodology:

• It is assumed that up to 20% of cars sold in 2035 could be non-ZEVs (ie. ICEs and all hybrids) under the derogation for vehicles running under so-called “carbon-neutral fuels”, while further weakening is caused by the “renewable fuels coefficient” which would artificially lower emissions from the use of biofuels in the car stock (40% biofuels assumed).

• PHEV emissions in 2035 are calculated using the 2025 utility factor due to the cancelling of the 2027/8 utility factor correction, resulting in official (WLTP) emissions being half their real-world emissions.

• It is assumed that 3 million vehicles (approx ¼ of the expected vehicles retired every year) will benefit from the scrappage credit of 35 g/km in the ACEA paper.

• The ACEA CO₂ credits cap (7 g/km) is assumed to be reached if carmakers claim a ‘green’ value chain using green certificate market instruments, such as guarantees of origin (GoOs), to artificially claim the use of renewable energy in material production.

• It is assumed that 40% of BEVs would benefit from ACEA's super-credits (1.33 multiplier) for small and affordable electric cars.