France and Germany reached a deal on October 15, 2026, to ease EU car pollution rules and allow Britain into the 'Made in Europe' public procurement scheme. The pact scraps offset requirements for residual combustion emissions by 2035 and extends EV super credits. While Prime Minister Andy Burnham welcomed the decision, the UK must align with EU tariffs on Chinese electric vehicles—which reach up to 45% compared to London's 10%—to participate.
Franco-German agreement on car rules
- ▪France and Germany reached a provisional deal on October 15, 2026, to soften EU car emissions targets and allow the UK to join the Made in Europe scheme.
- ▪The Franco-German automotive deal was agreed upon after German Social Democrats in Chancellor Friedrich Merz's government dropped their opposition.
- ▪Any Franco-German agreement on car rules requires approval from other EU member states and the European Parliament to take effect as law.
Proposed changes to EU emissions rules
- ▪The Franco-German deal eliminates the requirement for automakers to offset residual 10% emissions through low-carbon steel or sustainable fuels under proposed 2035 rules.
- ▪The Franco-German deal extends proposed EU super credits for electric vehicles to all car sizes and allows cars running on renewable fuels to count as zero-emission.
UK inclusion in Made in Europe
- ▪The office of British Prime Minister Andy Burnham welcomed the proposed inclusion of the UK in the EU Made in Europe scheme on October 15, 2026.
- ▪The Franco-German agreement restricts the Made in Europe status for cars to the 27 EU member states, while allowing opt-in conditions for Britain and Norway.
- ▪European carmakers requested Britain's inclusion in Made in Europe public procurement rules because of deeply integrated cross-border supply chains.
UK tariffs on Chinese electric vehicles
- ▪UK Business Secretary Jonathan Reynolds placed higher UK tariffs on Chinese electric vehicles under review while remaining cautious about potential Chinese retaliation against British carmakers.
- ▪Under the draft Franco-German deal, the UK must align with EU trade protection measures, including tariffs on Chinese electric vehicles, to qualify for Made in Europe status.
- ▪The UK imposes a 10% import duty on Chinese electric vehicles, whereas the European Union has imposed tariffs up to 45% since 2024.
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