France and Germany have agreed to ease proposed EU car emissions rules, keeping a 90% CO2 reduction target for new cars by 2035 but dropping the requirement for automakers to offset the remaining 10% with low-carbon steel, alternative fuels, or similar measures. The change lowers compliance costs and gives automakers more flexibility, but it also weakens the push to decarbonize the supply chain. The agreement also opens the door for British-made vehicles to qualify under the EU's proposed 'Made in EU' program, which would favor qualifying products in government purchases and subsidies. Britain would need to offer reciprocal treatment and align some trade and investment policies with EU rules, potentially including restrictions on Chinese-built hybrids and EVs. The compromise is not final. It needs support from other EU member states and the European Parliament before it becomes law.
