EU delays auto proposals, carbon border tariff plans likely also postponed

By Philip Blenkinsop and Kate Abnett

BRUSSELS, Dec 8 - The European Union has delayed by a week the release of closely watched proposals for the auto sector that could weaken a 2035 ban on new CO2-emitting cars, the European Commission confirmed on Monday.

Earlier, a draft Commission agenda seen by Reuters showed the bloc would push back the publication of its automotive package along with plans to widen its world-first carbon border tariff to include washing machines and other manufactured products. 

Both were due out on Wednesday but are now pencilled in for December 16.

A Commission spokesperson confirmed the new date for the auto proposals, but declined to confirm timings for the other policies. 

Negotiations are continuing as EU departments jostle for a place in the diary to release proposals by the end of the year.

AUTOMAKERS CALLING FOR FLEXIBILITY, CLIMATE GOALS AT RISK

The 2035 car emissions policy is being particularly closely watched by carmakers and governments, including Germany and Italy, which want the EU to allow continued sales of plug-in hybrids and combustion-engine cars that run on so-called CO2-neutral fuels such as those made from crops or waste. 

In its current form, the measure would effectively ban sales of new combustion-engine cars.

European carmakers have said they need flexibility on the 2035 car policy to cope with slower-than-expected electric vehicle sales and fierce competition from China.

But weakening the policy could hamper the EU's climate targets, since it would mean more CO2-emitting cars on Europe's roads by 2050, when the EU has committed to reach net-zero emissions across its economy.

Some EU officials suggested the autos proposals could be delayed further, into 2026.

Guido Guidesi, minister for economic development in Italy's auto industry-dependent Lombardy region, said that would simply create more uncertainty for carmakers.

"Further postponements and delays are unacceptable, because we are out of time - millions of jobs and entire industries are at risk," he said in a statement.

DIVISIVE BUY EUROPEAN PLANS PUSHED BACK

Beyond the planned expansion of the carbon border tariff to cover more products, Brussels is also preparing proposals to prevent foreign companies from circumventing the measure.

Under a proposal that remains on track to kick in from January, the EU carbon border tariff will impose fees on the CO2 emissions of imported goods including steel, aluminium and cement.

The draft Commission agenda said the EU would also delay to January 28 a so-called "Industrial Accelerator" policy setting requirements to prioritise locally manufactured products.

The proposal is an attempt to boost European industries in the face of cheaper imports from China, but it has split EU countries.

Governments including France are championing the idea, but others, including Sweden and the Czech Republic, warn that "buy local" requirements could deter investments, raise prices in government tenders and hurt the EU's competitiveness globally.

(Reporting by Kate Abnett, Philip Blenkinsop, Editing by Louise Heavens, Andrew Heavens and Joe Bavier)