EPP steers EU Automotive Package away from Green Deal

The European Commission has unveiled its long-awaited Automotive Package, officially framed as a bid to square the green transition with the competitiveness of Europe’s car industry. Yet behind the technocratic language and policy tweaks, the message coming out of Brussels is clear. When it comes to cars, the EU is shifting into reverse.

What’s in the Package?

The Automotive Package builds on the Commission’s Automotive Action Plan and on input gathered through the Strategic Dialogue launched in January 2025 with industry stakeholders. 

At its core is a revision of CO₂ emission standards for cars, vans, and heavy-duty vehicles. From 2035, manufacturers would still be required to cut tailpipe emissions by 90 per cent, but the remaining 10 per cent could be offset through the use of EU produced low carbon steel or by relying on e fuels and biofuels. In effect, the proposal widens the range of technologies deemed compatible with EU targets, reopening the door to options such as plug in hybrids that were largely excluded under the original Green Deal framework.

Before 2035, manufacturers would benefit from so-called “super credits” for affordable small electric cars produced in the EU. Further flexibility is built into the 2030 framework through the introduction of a banking-and-borrowing mechanism covering the 2030–2032 period. This is complemented by a less stringent target for vans and greater leeway for heavy-duty vehicles, enabling manufacturers to build up additional emissions credits in the years leading up to 2030.

The package also turns its attention to corporate fleets, introducing binding national targets designed to accelerate the adoption of zero- and low-emission vehicles by large companies. 

From 2030 onwards, Member States would be required to ensure that a minimum proportion of newly registered company cars and vans falls within these categories, including a dedicated sub-target for fully zero-emission vehicles. Public financial support would meanwhile be limited to vehicles that are both clean and produced in the EU.

A separate Automotive Omnibus seeks to cut red tape and reduce compliance costs for European manufacturers. 

Measures include exemptions for certain electric vans from smart tachograph and speed limiter rules, streamlined type approval and noise requirements, and the creation of a new vehicle category under the “Small Affordable Cars” initiative for electric models up to 4.2 metres in length. The aim is to enable more targeted incentives for small electric vehicles built in Europe.

Alongside the legislative proposals, the Commission also unveiled a Battery Boosting Strategy, designed to accelerate the build out of a fully European battery value chain, backed by €1.8 billion in funding.

A political trophy for the EPP

Politically, the Automotive Package reads less as a technocratic adjustment and more as a flagship victory for the European People’s Party. 

The revision of CO₂ standards in particular has been openly claimed by the EPP as one of its major policy wins of the new legislative term, with party officials privately hailing the package as a corrective to what they see as the excesses of the Green Deal.

EPP president Manfred Weber has personally leaned into the file, framing automotive policy as both a strategic priority and a symbol of the party’s renewed grip on EU decision making. Industrial pragmatism, long sidelined in the climate debate, is back at the centre of the conversation, and the EPP is firmly in the driving seat. 

The shift was anything but accidental. 

Multiple sources point to sustained pressure from Berlin, with Chancellor Friedrich Merz placing the easing of automotive rules at the top of his domestic political agenda. That pressure has translated directly into Brussels, landing squarely on Commission president Ursula von der Leyen and reshaping the balance between climate ambition and industrial politics.

Rolling back the previous mandate

More broadly, the Automotive Package fits into a wider pattern of rolling back key elements of the previous legislative term, driven by the very political family that once championed them. Under the banner of simplification, the EPP has taken the lead on a series of Omnibus initiatives that delay or dilute core Green Deal legislation.

The recent votes on the CSRD and the CS3D offer a clear illustration. 

On that file, the EPP aligned itself with right wing groups to weaken corporate sustainability reporting and due diligence obligations, marking a decisive shift away from the regulatory ambitions of the last mandate. 

The irony is hard to miss. The Commission president who once presented the Green Deal as a historic transformation is now overseeing its partial dismantling. What was framed as a once in a generation project is increasingly recast as an overreach in need of correction.

What now?

The legislative battle is only just beginning. Most elements of the Automotive Package will now head into the European Parliament and the Council, where the EPP is expected to push hard to maintain control of the file.

According to parliamentary sources, the group is keen to secure the rapporteurship, with Italian MEP Massimiliano Salini emerging as the frontrunner. A seasoned lawmaker with deep expertise in automotive and industrial policy, Salini has already made a series of public statements aligning closely with the package’s philosophy.

All eyes are now on the von der Leyen majority and whether it can recalibrate green policies without hollowing them out, or whether the EPP will once again seek backing to its right to lock in further concessions. 

The EU’s automotive transition will move forward regardless. But it will do so at a slower pace, with the Green Deal increasingly fading into the rear-view mirror.