GMPB — October 23rd — Franco-German Auto Deal Tests Europe’s Climate and Industrial Priorities

France and Germany seek more flexibility for Europe’s automotive industry

France and Germany have proposed a package to maintain the EU’s climate ambition while giving the automotive sector greater regulatory flexibility and stronger incentives for investment, research and European production.

The joint position, published on the 16th of October, calls for substantial reductions in CO₂ emissions alongside rules that reflect different market conditions and technological pathways. The governments say the next generation of electric vehicles should be developed and manufactured in Europe, with investment, innovation and production in France, Germany and across the bloc. They also propose incentives for European production and more resilient supply chains.

The proposal has drawn support from industry and fuel groups for its technology-neutral approach, but their statements identify areas where they want the text to go further. The Working Group on Monitoring Methodologies said the agreement supports the development of Recital 11 in the latest revision of the CO₂ standards. That recital provides for vehicles exclusively running on eligible fuels to be registered as zero-gram vehicles once the regulation enters into force.

The group said such vehicles are technically feasible and that existing monitoring methods, including digital systems, physical links and mass-balance approaches, could verify fuel use. It welcomed the inclusion of renewable and low-carbon fuels, but argued that eligibility should follow the Renewable Energy Directive’s criteria. Bioethanol France’s Nicolas Kurtsoglou said the “Made in Europe” criteria could prove difficult for some fuels and should be addressed in the forthcoming RED revision rather than further restricting eligible fuels in the car regulation.

The European Biodiesel Board also welcomed recognition of renewable fuels and the proposal’s support for a 90% tailpipe-emissions reduction target. It said the deal does not include the renewable-fuel credit system proposed in the Salini report, which it considers a direct incentive for further deployment. The board welcomed the proposal for eligible fuels to be “Made in the EU”, while calling for clarification that eligibility should cover all RED-compliant feedstocks.

The European Automobile Manufacturers’ Association said the joint position could accelerate negotiations on the Automotive Package, but said it omitted flexibilities such as using low-carbon materials to offset emissions and beginning averaging in 2028. It also described the proposed Industrial Accelerator Act’s geographical scope and 80% fleet-wide target as highly ambitious, and said the text does not adequately address the needs of vans, trucks and buses.

Transport & Environment said the proposed changes would weaken the CO₂ standards and Made-in-EU requirements, potentially slowing the shift to electric vehicles and weakening the case for investment in European battery production. It argued that the proposed battery-cell sourcing thresholds would be lower than current production levels, citing its estimate that more than half of cells used in electric vehicles sold in the EU were made in Europe in 2025. It said the proposed thresholds of 10% for 2028–2029 and 20% for 2030–2031 would put planned European battery capacity at risk.

ENVI amendments put transport funding, aviation coverage and ETS2 costs in focus

The latest ENVI amendments to the EU ETS revision propose changes affecting maritime monitoring, aviation coverage, decarbonisation funding and the costs of ETS2 for households. The amendments remain proposals for Parliament’s position.

In amendments to the maritime monitoring file, MEPs take competing positions on vessels below 5,000 gross tonnage. One group would remove the proposed extension of monitoring requirements to some smaller vessels, arguing it could impose disproportionate costs on small operators and affect essential services to islands and peripheral regions. Other amendments would include specified ship types, while Jeannette Baljeu and others propose monitoring all commercial cargo and passenger ships between 400 and 5,000 gross tonnage. Christophe Clergeau and Thomas Pellerin-Carlin likewise call for data collection to inform a later decision on whether to expand the ETS. These proposals concern monitoring and reporting; they would not, by themselves, bring the ships into the ETS.

Other maritime amendments would require more ship-level data to be made public, including fuel use by type, average speed, time in port and connection to onshore power. Annalisa Corrado also proposes retaining a Commission report every two years, assessing sustainable fuels, efficiency measures and methane and nitrous oxide emissions, including fuel slip. A separate set of amendments seeks longer-lasting derogations and targeted support for outermost regions, including exemptions for smaller ships providing essential inter-island services until technically and economically feasible alternatives are available. The proposals would also direct ETS revenue towards those regions’ vessels, fuels, port infrastructure and energy systems.

Amendments dated the 20th of October would extend the proposed Industrial Decarbonisation Bank to aviation and maritime transport. They identify potential support for efficient propulsion, aerodynamic improvements, electrification, low- and zero-carbon fuels and associated infrastructure. Li Andersson and Jonas Sjöstedt propose a separate mechanism to finance an intermediary that would use double-sided auctions to support the production and uptake of EU-made renewable fuels of non-biological origin and synthetic fuels for aviation and shipping.

Aviation amendments reopen the relationship between the EU ETS and the International Civil Aviation Organization’s CORSIA scheme. Several amendments support extending the ETS to flights departing from the European Economic Area and landing at third-country airports within 5,000 kilometres of the EU’s geographic centre. The proposals would begin in 2029, run for four years and be reviewed in 2032. Katri Kulmuni takes the opposing position, arguing that CORSIA’s mandatory phase from 2027 could increase participation and that the EU should wait before extending its geographic scope.

Further aviation amendments address ETS support for alternative fuels and measures to limit contrail warming. One proposal would remove the number-of-flights criterion from an exemption for some business aviation operators, arguing that operators whose emissions fall below the relevant threshold may remain outside CORSIA. For road transport, the amendments focus on ETS2’s household effects: Martin Günther proposes reporting on distributional impacts, including energy poverty and access to alternatives; Pascal Canfin proposes stronger price protections for vulnerable households; and Ondřej Knotek and other MEPs propose repealing ETS2.

Commission says Port Services Regulation has brought limited change to existing practices

The European Commission’s report on the functioning and effect of the Port Services Regulation finds that many conditions governing port services were already in place before the rules applied, limiting the extent to which the regulation’s effects can be isolated.

The regulation applies to 327 ports on the trans-European transport network: 97 in the core network and 230 in the comprehensive network. It establishes a framework for port services and common rules on financial transparency, while leaving member states flexibility over port-management models. Its rules apply in full to bunkering, mooring, collection of ship-generated waste and cargo residues, and towage.

The Commission’s support study found that minimum requirements were the condition most frequently applied to port services, followed by limits on the number of providers and public-service obligations. Most responding providers said the regulation had not changed the requirements they faced. The report notes that France, Italy and Spain had notified the Commission of national-flag requirements used as part of minimum requirements for port-service providers.

The report was due by March 2023 but was completed in 2026 after delays in receiving information from member states and low response rates to a stakeholder questionnaire. The Commission describes it as a snapshot of implementation and functioning, rather than an evaluation of the regulation. The limited response rate therefore constrains how far its findings can be treated as representative of the sector.