France and Germany Near Deal to Ease EU 2035 Car Emissions Target and Include UK

France and Germany are close to reaching an agreement that could ease the European Union's 2035 carbon dioxide emissions requirements for new cars while allowing the United Kingdom to qualify under proposed "Made in Europe" automotive manufacturing rules. According to diplomats cited by Reuters on 15 October 2026, the provisional agreement would set a 90% reduction target for car emissions by 2035, without requiring manufacturers to offset the remaining emissions. The proposal remains subject to confirmation and would need support from other EU Member States and the European Parliament.

 

In December 2025, the European Commission proposed that emissions from new cars fall by 90% compared with 2021 levels by 2035, requiring manufacturers to address the remaining 10% through measures such as low-carbon steel and alternative fuels. Under the emerging Franco-German compromise, the 90% reduction would stand without additional compensatory obligations. The change would provide greater flexibility for manufacturers, particularly German automakers that have sought adjustments to the EU's vehicle emissions requirements. However, the position is not yet settled within Germany, where an alternative proposal involving a 95% emissions reduction and additional offsets has also been discussed.

 

The negotiations also cover proposed European local-content requirements for products benefiting from public procurement, government auctions and subsidy programmes. France has supported restricting eligibility to goods manufactured within the EU, while Germany and other Member States favour including selected trading partners with closely integrated supply chains. The provisional compromise would extend the automotive definition of "Made in Europe" beyond the EU's 27 countries to European partners that participated in the EU internal market on 1 January 2020. This would include the United Kingdom, which left the EU single market at the end of 2020.

 

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British participation would nevertheless be conditional. The proposal calls for "full reciprocity" and alignment with certain EU investment and trade protection measures. This could require the UK to adopt restrictions similar to those introduced by the EU concerning Chinese-manufactured hybrid and electric vehicles. An official from UK Prime Minister Andy Burnham's office indicated that inclusion would benefit Britain's automotive industry, while emphasising that the proposal still requires European agreement and that its detailed conditions remain unclear.

 

The possible compromise reflects continuing negotiations over how Europe should balance automotive decarbonisation targets with industrial competitiveness and regional manufacturing interests. Changes to the 2035 emissions requirements would affect manufacturers' long-term vehicle development strategies, while the proposed local-content provisions could influence electric vehicle supply chains and access to public support. No agreement has yet been formally adopted, and the outcome will depend on negotiations among EU governments and lawmakers.