The European Union’s recent proposal to relax emission reduction regulations for the automotive industry has drawn criticism from the sector. While the proposal would cancel the ban on internal combustion engine car sales, it still obliges automakers to use green steel and renewable fuels as offsets.

Germany’s industry group VDA described the plan as ineffective and burdensome, saying it ties emission compliance to factors such as green steel or renewable fuels, which are beyond carmakers’ control. Members in the European Automobile Manufacturers’ Association, including Volkswagen and Stellantis, said the proposal is only a first step and urged greater flexibility and realistic made in Europe requirements.

The proposals are now being reviewed by the European Parliament and member states, with several governments pushing for further changes, especially on compliance mechanisms.