BRUSSELS — Powerful political allies helped automakers force the EU to water down climate laws for cars — and now the aviation sector is borrowing those tactics. Their big target is getting the EU to dilute its mandate forcing airlines to use increasing amounts of cleaner jet fuels, alternatives to kerosene that are also much more expensive and harder to source. Aviation is emerging as the next crucial stress test for the EU’s climate agenda, as key leaders push to do whatever it takes to help struggling European businesses. With industry and allied governments pressing for relief from costly green rules, the fight will show how far Brussels is willing to go — and what it is willing to give up — in pursuit of its climate goals. “I will make a bet today that what happened to the car regulation will happen to the SAF [Sustainable Aviation Fuels] regulation in Europe,” French energy giant TotalEnergies CEO Patrick Pouyanné predicted at the World Economic Forum in Davos earlier this month. Carmakers provide a model on how to get the EU to backtrack. The bloc mandated that no CO2-emitting cars could be sold from 2035, essentially killing the combustion engine and replacing it with batteries (possibly with a minor role for hydrogen). But many carmakers — allied with countries like Germany, Italy and automaking nations in Central Europe — pushed back, arguing that the 2035 mandate would destroy the car sector just as it is battling U.S. President Donald Trump’s tariffs, sluggish demand and a rising threat from Chinese competitors. “I will make a bet today that what happened to the car regulation will happen to the SAF [Sustainable Aviation Fuels] regulation in Europe,” Patrick Pouyanné said. | Ludovic Marin/ AFP via Getty Images In the end, the European Commission gave way and watered down the 2035 mandate, which will now only aim to cut CO2 emissions by 90 percent. AVIATION DEMANDS The aviation sector has a similar list of issues with the EU. It is taking aim at a host of other climate policies, such as including aviation in the bloc’s cap-and-trade Emissions Trading System and intervening on non-CO2 impacts of airplanes like contrails — the ice clouds produced by airplanes that have an effect on global warming. Brussels introduced several regulations over the last 15 years to address the growing climate impact of air transport, which accounts for about 3 percent of global CO2 emissions. Those policies include the obligation to use sustainable aviation fuels, to put a price on carbon emissions and to take action on non-CO2 emissions. Each of these green initiatives is now under attack. The ReFuelEU regulation requires all airlines to use SAF for at least 2 percent of their fuel mix starting this year. That mandate rises to 6 percent from 2030, 20 percent from 2035 and 70 percent by 2050. “Today, all airline companies are fighting even the 6 percent … which is easy to reach to be honest,” Pouyanné said, but then warned, “20 percent five years after makes zero sense.” He is echoed by CEOs like Ryanair’s combative Michael O’Leary, who called the SAF mandate “nonsense.” “It is all gradually dying a death, which is what it deserves to do,” O’Leary said last year. “We have just about met our 2 percent mandate. There is no possibility of meeting 6 percent by 2030; 10 percent, not a hope in hell. We’re not going to get to net zero by 2050.” Brussels-based airline lobbies are not calling for the SAF mandate to be killed, rather they are demanding a book-and-claim system. Under such a scheme, airlines could claim carbon credits for a certain amount of SAF, even if they don’t use it in their own aircraft. They would buy it at an airport where it’s available and then let other airlines use it. That would make it easier for airlines to meet the SAF mandate even if the fuel is not easily available. However, so far the Commission is opposed. LOBBYING BATTLE The car coalition only worked because industry allied with countries, and there are signs of that happening with aviation. The sector’s lobbying effort to slash the EU carbon pricing could find an ally in the new Italo-German team-up to promote competitiveness. The German government last year announced a plan to cut national aviation taxes — with the call made during the COP30 global climate conference, something that angered the German Greens. Italian Prime Minister Giorgia Meloni and German Federal Chancellor Friedrich Merz attend the Italy-Germany Intergovernmental Summit at Villa Doria Pamphilj. | Vincenzo Nuzzolese/LightRocket via Getty Images Italian Prime Minister Giorgia Meloni said Friday that she and German Chancellor Friedrich Merz wanted to start “a decisive change of pace … in terms of the competitiveness of our businesses.” “A certain ideological vision of the green transition has ended up bringing our industries to their knees, creating new dangerous strategic dependencies for Europe without, however, having any real impact on the global protection of the environment and nature,” she added. Her far-right coalition ally, Italian Transport Minister Matteo Salvini, has called the ETS and taxes on maritime transport and air transport “economic suicide” that “must be dismantled piece by piece.” COMMISSION SAYS NO As with the 2035 policy for cars, the European Commission is strongly defending its policy against those attacks. Apostolos Tzitzikostas, the transport commissioner, stressed the EU’s “firm commitment” to stick with aviation decarbonization policies. “Investment decisions and construction must start by 2027, or we will miss the 2030 targets. It is as simple as that,” the commissioner said in November when announcing the bloc’s new plans to boost investment into sustainable aviation and maritime fuels. Climate campaigners fought hard against the car sector’s efforts to gut 2035, and now they’re gearing up for another battle over aviation targets. “The airlines’ whining comes as no surprise — yet it is disappointing to see airlines come after such a fundamental piece of EU legislation,” said Marte van der Graaf, aviation policy officer at green NGO Transport & Environment. She was incensed about efforts to dodge the high prices set by the EU’s ETS in favor of the U.N.’s cheaper CORSIA emissions reduction scheme. Airline lobbyA4E said its members paid €2.3 billion for ETS permits last year. “By 2030, [the ETS cost] should rise up to €5 billion because the free allowances are phased out,” said Monika Rybakowska, the lobby’s policy director.  A recent study by the think tank InfluenceMap found that airlines are working to increase their impact on policymakers by aligning their positions on ETS. T&E also took aim at a recent position paper by A4E that asked the EU to postpone measures to curb non-CO2 pollution — such as nitrogen oxides and soot particles that, along with water vapor, contribute to contrails. The A4E paper said that “the scientific foundation for regulating non-CO2 effects remains insufficient” and “introducing financial liability risks misdirecting resources.” This is “an outdated excuse,” responded T&E, noting that the climate impact of contrails has been known for over 20 years.

The European Commission on Tuesday reversed its flagship ban on producing new combustion engine cars by 2035, even as it vowed to meet its ambitious climate targets. In a major win for industry, the current requirement for automakers to reduce tailpipe emissions from new vehicles by 100 percent by 2035 is now gone. The reformed legislative proposal, published Tuesday, will now call on companies to lower these emissions by 90 percent from 2021 levels. “This will allow for plug-in hybrids, range extenders, mild hybrids, and internal combustion engine vehicles to still play a role beyond 2035, in addition to full electric and hydrogen vehicles,” the Commission said in a press release unveiling its automotive package on Tuesday afternoon. The package, which includes a new regulation on greening corporate fleets, a battery initiative and regulatory simplification measures, marks a major victory for the automotive industry and the center right, which had campaigned ahead of the 2024 European election on overturning the ban. European People’s Party chief Manfred Weber was elated by the changes, telling media on Tuesday morning that the 90 percent target was “clearly an EPP request. We were amending this also when the legislation was first time discussed in the Parliament four years ago. So we are coming back to our original EPP positioning.” For its part, the Commission staunchly maintains the ban is still in place but with added flexibilities for European automakers struggling with a U.S.-led trade war, lackluster car sales and stiff competition from Chinese incumbents with their glitzy electric vehicles. ALL ABOUT AVERAGES The Commission is also watering down its target of a 50 percent reduction in emissions by 2030 by allowing automakers to calculate average emissions over three years (2030 to 2032). The change mirrors an amendment signed into law earlier this year that averaged the 2025 emissions target over three years after intense lobbying from the industry and their political allies. Both the 2025 and 2030 targets are part of the overarching 2035 law that banned new CO2-emitting vehicles, with the interim targets intended as goalposts to keep automakers on track. The EU executive is also altering the 2030 emissions-reduction target for light-commercial vehicles, such as delivery vans, lowering it from a 50 percent reduction to 40 percent of 2021 levels. CREATING DEMAND The measure for greening corporate fleets — vehicles owned or leased by companies for business purposes — sets targets for what proportion of each EU country’s fleet should be zero- or low-emission, based on their GDP. It is hoped the regulation will create a second-hand market for EVs to foster a “swifter transition away from older combustion engine” cars, and act as a demand mechanism to complement the 2035 law. While the targets are binding, the Commission says it is giving discretion to the capitals on how the targets should be achieved. It anticipates most will incorporate favorable tax policies for companies, pointing to Belgium as an example, which has boosted its share of EVs on the road through tax breaks. Under the proposal, plug-in hybrids, range extenders and combustion engine vehicles would all count toward the target but with the same caveats. Under the reform, all powertrains will be available as part of the 10 percent, but the Commission is mandating that automakers offset the emissions with made-in-EU green steel and alternative fuels. Small and mid-sized companies will be exempt from the law, a Commission official said in a media briefing Tuesday ahead of the Parliament presentation. SMALLER IS BETTER The automotive omnibus — a regulatory red-tape cutting scheme — focuses on a small-car initiative that Commission President Ursula von der Leyen announced during her September State of the Union address. A small EV will be defined as measuring 4 meters and 20 centimeters in length, the size of a compact car. The cars have their own regulatory category in the legislation and have been given specific concessions like subsidies and reserved parking spaces. Companies that produce small cars would also get a coefficient of 1.3 in the emissions target calculations, meaning that if a carmaker sold 10 small EVs they would get emissions credits worth 13 cars. But the initiative will only be in place until 2034, the EU executive said. As with corporate fleets, manufacturers will have to comply with local content requirements when manufacturing small EVs in order to get the emissions credits. France has long demanded that any flexibilities around the ban be tied to local content requirements — a request it put forward in October alongside Spain.

The European Commission is set to water down the EU’s 2035 de facto combustion engine ban by requiring automakers to lower their emissions by 90 percent instead of the original 100 percent, multiple officials with knowledge of the discussions told POLITICO. The change effectively marks the end of the ban, giving the center-right political parties and the automotive sector a massive win after months of heavy lobbying. Under the deal, which is still being negotiated at the time of publication, automakers can sell plug-in hybrids and range extenders after 2035. But those flexibilities will be tied to automakers “offsetting” the 10 percent extra emissions by using green steel and alternative fuels. How the offsets will work and what percentage of fuels or steel will need to be consumed in production is still being negotiated. The industry argues the law banning the new sale of CO2-emitting vehicles cuts them off at the knees and makes them less able to compete against Chinese incumbents that are ahead of them on electric vehicles.  Automakers are facing further headwinds courtesy of a trade war launched by U.S. President Donald Trump and sluggish sales at home. Climate advocates say the Commission needs to stay the course.  “The EU is playing for time when the next game has already started. Every euro diverted into plug-in hybrids is a euro not spent on EVs while China races further ahead,” said William Todts, executive director of green NGO Transport & Environment. The deal mirrors one announced by Manfred Weber, head of the European People’s Party, on Dec. 11. He told German media that the combustion engine ban had been overturned, with the 2035 target of 100 percent CO2 reduction cut to only 90 percent. The Financial Times was the first to report the 10 percent reduction. New details are emerging, however, about what powertrains will be allowed after 2035. In the current plan, range extenders — small combustion engines that give batteries more range — will count for a further emissions reduction than plug-in hybrids, which have both a combustion engine and an electric motor. Essentially, the scheme would give automakers more emission credits for range extenders than plug-in hybrids because they emit less CO2 than the hybrids, two officials said. The 2035 reform is part of a broader automotive package being put forward by the Commission on Tuesday that will include a new regulation on greening corporate fleets — vehicles owned or leased by companies for business purposes — and an automotive omnibus that was obtained by POLITICO. Essentially, the scheme would give automakers more emission credits for range extenders than plug-in hybrids because they emit less CO2 than the hybrids, two officials said. | Lorenzo Di Cola | Getty Images For the 2035 legislation, automakers will be allowed to pool, meaning that a brand that doesn’t meet the 90 percent target can buy credits from an automaker that over delivers. The pooling scheme is a lucrative business for all-electric manufacturers like Tesla. A separate initiative will focus on boosting small electric vehicles — a demand put forward by Commission President Ursula von der Leyen in her State of the Union address in September. Companies that produce the small cars would get a coefficient of 1.3 in the target calculations. So if a carmaker sold 10 of the small EVs, they would get the emissions credit of 13 cars. Manufacturers will have to comply with yet-to-be-defined local content requirements when creating the small EVs in order for the automaker to get the emission credit. France has long demanded that any flexibilities around the ban be tied to local content requirements — a request it put forward in October alongside Spain. The draft marks the first step in a long, politically fraught journey to becoming law. It will now go to Parliament and the EU capitals, where political groups remain divided over how far the Commission should go to rescue the automotive sector. The EPP has pushed hard to overturn the ban and the far right has campaigned on the issue, too, which could prompt yet another alliance between the two in Parliament to push to further weaken the law. EU capitals also have competing ideas. Spain wants the target to remain unchanged, while Germany is balking at France’s push for “Buy European” requirements, over fears it will spark a global trade war with the U.S. and China.

BRUSSELS ― As usual, a summit of the European Union looks like a summit of European disunity. What’s different is that this time it’s not just the usual suspects threatening to throw a spanner into Brussels’ well-oiled machine, which usually tries to prioritize consensus over everything else. From how to use frozen Russian assets to finance Ukraine to questioning the EU’s climate targets, the agenda is packed with potential flashpoints. Here’s a look at the leaders who are sharpening their elbows and readying their vetoes.  SLOVAK PRIME MINISTER ROBERT FICO  The Slovak strongman has already signaled his intent to derail Thursday’s summit, announcing on X that he is “not interested in dealing with new sanctions packages” against Russia unless the EU comes up with a plan to help Slovakia’s struggling automotive sector. Leaders are expected to finally approve the 19th package, announced last month, at the summit. Fico is among the most Kremlin-friendly leaders in the EU, visiting Moscow last December and again in May, and has raised objections to sanctions before, though he has ultimately always backed down from his repeated threats to block each new package. It’s likely he will do so again, perhaps after extracting some concessions for Bratislava’s car industry.   HUNGARIAN PRIME MINISTER VIKTOR ORBÁN  The EU’s agitator-in-chief is, as always, expected to cause a ruckus. Orbán has stood in the way of unanimity at previous summits, especially on the subject of funneling financial and military aid to Ukraine, forcing the other 26 EU member countries to put out a joint statement without his signature. He could do so again. He has also repeatedly spoken out against a plan to seize Russian assets, arguing it could harm Budapest’s relations with Moscow. As a result, the EU is working on a way to legally sidestep his veto — which, if the bloc can pull it off, is sure to rile the typically pugnacious Hungarian leader. Orbán’s foreign minister,  Péter Szijjártó, denied Hungary would block the 19th package of sanctions. Unusually, Orbán is expected to skip much of the summit due to a national holiday commemorating the Hungarian Revolution of 1956. He will arrive later in the day (though his presence is still sure to loom over the proceedings) and be represented at the discussions in the meantime by Fico.  BELGIAN PRIME MINISTER BART DE WEVER  Who’d have thought that compromise-obsessed Belgium would become the one to throw its weight around at a European Council? It’s certainly not a role the Belgians have been used to playing. But that’s before they elected a right-wing Flemish nationalist steeped in the politics of upsetting the status quo as prime minister. The issue that’s concerning him is niche but affects Belgium in a unique way. The EU has warmed to the previously unthinkable idea of seizing €140 billion in Russian assets to fund a big new tranche of aid for Ukraine. (The plan that everyone had agreed on in the past was just to use the interest those assets were accruing.) The problem for de Wever is that most of these assets are housed in Belgium, at the Brussels financial depository Euroclear. The Belgian government is worried that it could bear the brunt of Moscow’s legal and financial retaliation if the EU breaks open the piggy bank.  After days of tension, Belgium has signaled it won’t stand in the way, but wants some legal assurances that the bloc will share the risks before signing onto any proposal. Other leaders, including Orbán, but also Luxembourg’s Prime Minister Luc Frieden and Croatian Prime Minister Andrej Plenković, have voiced similar concerns about the legal complexity of the plan. GERMAN CHANCELLOR FRIEDRICH MERZ  Merz has one thing on his mind going into Thursday’s EUCO: the fate of Germany’s automotive sector.  Ahead of the last leaders’ summit in Copenhagen, he vowed to put a “stick in the wheels” of the EU’s “legislative machine,” and now he is urging the European Commission to overturn its de facto combustion engine ban, co-signing a letter with Italy earlier this month calling for a radical overhaul of the legislation.   Berlin is backed by Slovakia, the Czech Republic and Poland — all of whom have a strong automotive supplier industry — and Austria. France is also open to giving automakers concessions on the 2035 zero emissions target if they include a certain percentage of European components in their vehicles. With the Commission putting forward a revision of the legislation by the end of the year, it’s a question of how many concessions Merz can extract. Scrapping the 2035 deadline outright remains politically difficult, but Merz is pushing for tweaks — notably “technological neutrality,” code for allowing alternative fuels into the mix and, in practice, keeping the combustion engine alive well beyond 2035.   Jordyn Dahl contributed to this report. 

LIVERPOOL, England — Gary Smith, the general secretary of the GMB union, has urged Labour to rethink its energy policy, or risk losing support among working class communities. Speaking in the POLITICO Pub at Labour conference Tuesday, Smith said the government was not “in the right place” on its energy policy as he warned the approach could alienate swathes of its working class supporters. “Moving to net zero is not cheap. It’s not going to be easy, and if you get it wrong it has huge consequences for the economy and for working people,” he said. “The truth is that at the moment, the whole green thing, the net nero thing, is switching working class communities off. People are not buying it.” His comments come ahead of a decision on Labour’s plans for the North Sea after the government proposed a ban on new oil drilling licenses. But Smith urged Labour not to “fudge” the policy, warning that its approach was already costing the party support ahead of crunch Scottish Parliament elections next year. “If they don’t listen to us, they’re going to face some harsh realities,” the union boss warned. The GMB general secretary also hit out at plans to increase the use of electric heating options as “just rubbish,” adding they would not be possible to roll out on a large scale. And ministers, he argued, were still “misunderstanding” the prospect of the alternative fuel approach being an effective way to reduce the U.K.’s reliance on gas. “I’m pragmatic and a realist. We’re going to need oil and gas for a long time to come. This nonsense that we’re moving to electric heat anytime soon is rubbish,” he said. “The number of people connecting to the gas grid is going up. The AI data centers are going to need gas for energy. That’s the truth.” And Smith said there were lessons to be learnt from U.S. President Donald Trump and Vice President J.D. Vance’s ability to connect with working class communities who feel “angry” about being abandoned by the mainstream political system. “There is stuff we need to learn from that, and that’s about listening to working class people’s concerns. People are not voting for cheap TVs and cheap training shoes anymore… People want jobs back. They want opportunity back. They want the standard of living to be rising again,” he said. “So, does the prime minister learn a lot from Trump? No, but what we do need to get better at is connecting and listening to working class people.”