Susanna Riva The recent agreement between Paris and Berlin has reopened the debate on the future of the automotive industry in Europe , introducing two elements that could reshape the sector: the recognition of alternatives to electric vehicles alone and a focus on Made in Europe to protect the continent's industrial supply chain. The agreement, known as the Paris-Berlin Agreement , was formalized on October 16 and proposes significant changes to the 2035 emissions reduction targets.
The Franco-German proposal of October 16: 90% target and room for alternatives
The agreement signed on October 16 by Emmanuel Macron and Friedrich Merz proposes to set a 90% reduction in CO₂ emissions from new cars by the deadline, without imposing the obligation to offset the remaining 10% through measures such as the use of low-emission steels or alternative fuels.
This approach differs from previous proposals that aimed for more stringent reductions, up to 100% , and which included compensation mechanisms for the remaining quotas.
In fact, the solution presented by Paris and Berlin maintains the orientation towards electric cars as the main route to decarbonisation, but leaves a residual margin for internal combustion engine vehicles if powered by non-fossil fuels.
This approach aims to safeguard the competitiveness of European manufacturers at a time marked by international and economic pressure.
Why 90% is significant
The 90% target represents a compromise: it drastically reduces emissions compared to the current situation but does not require the complete elimination of traditional engines. The stated aim is to prevent overly rigid rules from creating difficulties for European companies engaged in the transition, taking into account external factors that impact costs and competitiveness.
Made in Europe: percentages and supply chain protection
Alongside the issue of emissions, the agreement emphasizes strengthening local production. The proposal requires at least 70% of automobile components, excluding battery systems, to be of European origin in order to qualify for incentives and public procurement. For batteries, a sector where international competition is more pronounced, the threshold is 10%.
This approach aims to focus public resources on the European supply chain, preventing incentives from fueling massive imports of vehicles produced outside the continent. This is a significant parameter, given that studies show that approximately 80% of vehicle components assembled in Europe are already European in origin, which supports the idea of being even more ambitious in terms of local content.
Implications for Italy and sector positions
Italy 's role emerged behind the scenes of the mediation: according to representatives of the national sector, the government worked discreetly to forge agreements that would facilitate a compromise between Paris and Berlin. Roberto Vavassori , president of Anfia , reaffirmed that "the Italian government has worked very well" and emphasized the opportunity offered by the agreement in alternative fuels, a sector in which companies like Eni are showing interest.
On the other hand, the proposal has attracted criticism: Michele Crisci , president of Volvo Italy , called it a mistake to “politicize the automotive industry and water down the objectives,” recalling that the European industry has wasted time in global competition and that the transition requires strategic clarity rather than regulatory slowdowns.
Biofuels and technology neutrality
Among the alternatives resurfacing in the debate are biofuels , seen by some as an option to maintain a share of internal combustion engines without compromising the climate objective. The Franco-German agreement will support solutions that allow different technologies to be evaluated within a defined framework, favoring so-called technological neutrality rather than an exclusive choice of electric propulsion.
The regulatory review process will now involve the main decision-making bodies of the European Union , where political debate will continue to shape thresholds, obligations, and constraints on local content. Meanwhile, the industry and national governments are evaluating the effects of a potential regulatory transition that seeks to combine environmental sustainability, industrial innovation, and the protection of European competitiveness.