Susanna Riva During a press briefing held on the sidelines of the European Council, German Chancellor Friedrich Merz outlined the terms of an agreement reached with France on the future of the automotive industry. The statement focused on a clear objective: a significant reduction in CO2 emissions from vehicles produced and placed on the market.
The proposal, explained by Merz, includes numbers and operational openings that could redefine industrial choices and energy policies: it calls for a 90% reduction in emissions by 2035 , accompanied by a specific text on the treatment of the remaining 10% and the possibility of using alternative fuels or biofuels in the transition process.
Details of the agreement between Germany and France
According to the Chancellor, the agreement emphasizes a specific quantitative target: a 90% reduction in CO2 emissions from the automotive sector by 2035. In his public address, Merz clarified that the measure is intended to be stringent compared to current emission levels, but leaves room for alternative measures to cover the remaining share, specifying "without the obligation to offset the remaining 10%".
This point is relevant because it introduces flexibility compared to schemes that would impose total neutralization through compensatory measures.
Role of alternative fuels and biofuels
A concrete element of the agreement is the openness to the use of alternative fuels and biofuels as tools compatible with the reduction target. The use of these solutions is presented as a complement to vehicle decarbonization, offering automakers and fuel suppliers technological alternatives to electrification alone. In this sense, the possibility of integrating lower-impact fuels could represent a transition path, especially for segments that are difficult to fully electrify.
Consent to delegations and legislative process
Merz also emphasized that the proposal is not an isolated bilateral agreement: according to the Chancellor, the text has garnered support among other delegations attending the European Council, signaling broad political willingness to discuss the issue at the EU level. However, he emphasized that transforming the agreement into law will require formal legislative approval: the proposed measures will need to be translated into legal acts and submitted to the competent bodies for approval before they become binding.
This legislative phase is crucial because it will define the implementation methods, timelines, and oversight mechanisms: without a detailed regulatory framework, the agreement risks remaining a political declaration. Merz, in his speech, therefore called for joint work to translate the commitments into concrete proposals that can be discussed in the relevant parliaments and institutions.
Implications for the European automotive industry
The proposed 90% reduction by 2035 poses significant technical and industrial challenges: automakers may need to accelerate investments in low-impact propulsion systems, charging infrastructure, and the alternative fuel supply chain. At the same time, the clause avoiding a full offset requirement— "without the obligation to offset the remaining 10%" —opens up scenarios in which net emissions reductions could be achieved through a mix of solutions rather than a single, binding requirement.
From a public policy perspective, the agreement could influence incentives, certification standards, and guidelines for the production and distribution of biofuels . The decisions that follow the agreement will impact not only companies, but also energy suppliers, regulators, and, more generally, the European road transport decarbonization strategy.