EU 2035 Auto Rules Could Create More Space for Biofuels

France and Germany are moving toward a possible compromise over the future of Europe’s automotive industry, including changes to the EU’s 2035 vehicle emissions rules. Under the European Commission’s revised proposal, automakers would face a 90% reduction in tailpipe CO₂ emissions from 2035, rather than the previous 100% target. The remaining 10% could be addressed through mechanisms linked to biofuels, e-fuels and EU-produced low-carbon steel.

Germany is pushing for a technology-neutral approach that would allow internal-combustion engines using renewable or low-carbon fuels to continue operating after 2035. If adopted, the approach could create additional policy space for HVO, FAME and other low-carbon fuels in Europe’s transport sector.

However, the final rules remain under negotiation, and the eligibility of specific biofuels has yet to be clarified.