Recommendations ahead of the October European Council (2040 target and road/ICE ban).
Date
Tue, 10/21/2025
Sections
Climate & Environment
Dear Excellency,
The European Fuel Manufacturing industry is committed to contribute to the EU ambition to reach climate neutrality by 2050. To be successful, the right pathway must be ensured. One of the key factors in this ambitious journey is that the energy and climate transition should be rooted in a technology- neutral legislative framework that:
- safeguards the competitiveness of European industries, ensuring that “made in EU” products are not disadvantaged with respect to global competitors;
- fosters and supports investments to develop and scale-up all viable decarbonisation solutions, ensuring that these investments occur within the EU rather than being offshored elsewhere;
- delivers Europe’s climate goals while preserving economic strength and citizens welfare everywhere in the EU;
- ensures security of energy supply and resilience of both civilian and military systems in times of peace and during crises.
Ahead of the October European Council, FuelsEurope and its 40 Member Companies would like to make the following recommendations on two crucial items:
1. A new EU target for 2040 should be based on a thorough assessment and a realistic follow up of what is achievable. The experience with the 2030 EU target and the challenges that Member States face in meeting it through their national plans, already provide valuable insights that should be taken into consideration. The achievement of a new 2040 target will critically depend on the enabling conditions that should be ensured. These should be clearly defined and include, among others:
- Measures to ensure that energy remains competitive for industries and affordable for citizens, while strengthening Europe’s energy and raw materials sovereignty;
- Effective de-risking instruments to attract investments in renewable and low-carbon technologies;
- Public funding for research, development and innovation at a scale proportionate to the decarbonisation challenge;
- A coherent, technology-neutral and predictable regulatory framework that provides long- term certainty for investors
- Measures to secure the presence of strategic and critical supply chains within the EU.
Besides a robust process for defining it, the 2040 target embedded in the Climate Law should include a transparent mechanism of revision, allowing for adjustments to capture the evolving economic and social circumstances. The review clause should be based on the definition of key performance indicators (KPIs) and the monitoring of their evolution, such as:
- the % of EU GDP generated from the industry
- the net the balance between jobs created and lost in EU industry,
- the trade balance of industrial products and energy,
- the EU investments occurring in the EU and those offshored from the EU to other regions
- regional disparities in the pace of the transition within the EU
- and any other economic indicators useful to measure the economic resilience and sovereignty of the EU Member States and the EU industries.
The European Commission should be required to regularly monitor these KPIs and promptly report the findings to the Council of the European Union and the European Parliament ensuring transparency and accountability in the assessment process. Based on the analysis of KPIs and enabling conditions, the 2040 target should be adjusted to ensure that ambition remains aligned with Europe’s economic and industrial realities.
The integration of international credits should be advanced beyond the current 3% cap and from the outset of the post-2030 framework, as these credits can play a valuable role in achieving net zero and in supporting the proper functioning of the carbon market. In parallel, flexibility within the EU ETS should be strengthened through the inclusion of removals and international credits, ensuring that all ETS sectors have equal access to diverse decarbonisation options. At the same time, policy integrity must be enhanced through greater transparency on residual emissions, enabling a clearer understanding of where further decarbonisation efforts should be focused and what additional policy instruments may be required to reach the EU’s targets.
2. In the context of the clean mobility, the current CO2 regulation for cars and vans has put in place a very rigid one-dimensional pathway: 100% CO2 in 2035 with interim targets in 2025 and 2030 which, as underlined by the car industry, are no longer realistic to achieve under current framework conditions and market demand. To continue on the transition pathway, we need to align decarbonisation goals with competitiveness and resilience of both the automotive and the fuels value chains. As increasingly requested by many stakeholders, the legislator must embrace the principle of technology neutrality, allowing renewable and low-carbon fuels, in addition to electrification, to be recognised towards compliance with the CO2 standards car regulation.
We remain committed to working with the European Institutions to turn ambition into achievable, competitive, and sustainable progress.