Paris and Berlin have struck a deal allowing the UK to join the EU's "Made in Europe" public procurement scheme, contingent on London aligning its China tariffs with the bloc. The agreement covers car manufacturers in the 27 EU member countries and the UK, referencing partners from the internal market as of January 1, 2020. However, the UK must accept EU trade protection measures, including tariffs on Chinese electric vehicles, to benefit from the status.
The deal also relaxes the EU combustion engine phaseout target for 2035. Negotiations remain ongoing, with French President Emmanuel Macron suggesting an imminent agreement. The compromise delivers market access sought by UK Prime Minister Andy Burnham but requires trade measures he has ruled out.
For Germany's car industry, the draft further waters down emissions reduction requirements, proposing a 90 per cent CO2 reduction target by 2035 rather than 100 per cent, compensating the remainder with low-carbon steel or sustainable fuels. The proposal removes the obligation for manufacturers to offset emissions. Other provisions include less strict rules for plug-in hybrids and a more favourable regime for renewable fuels, alongside flexible corporate fleet electrification mandates demanded by Germany and the industry.
Source: Financial Times Companies · Summarized by HeadlinesBriefing