Automotive Package: recognition of renewable fuels is a step in the right direction, but framework design will be decisive

Automotive Package: recognition of renewable fuels is a step in the right direction, but framework design will be decisive

The European Commission has announced its Automotive Package, proposing changes to CO₂ standards for cars and vans, including a reduction of the tailpipe CO2 emissions to 90% by 2035 and the recognition of renewable fuels as part of the compliance framework. While this announcement signals an openness to a broader set of decarbonisation solutions, the announced limits could undermine a real opening to ICEs and renewable fuels.

The acknowledgement that renewable fuels can contribute to transport decarbonisation represents a step in the right direction. It reflects the reality that achieving climate neutrality will require multiple technological pathways, alongside electrification and hydrogen, and that an effective transition must remain genuinely technology-neutral.

For renewable liquid gases, this recognition is particularly relevant. These fuels are produced locally in Europe, support European industrial value chains, and can deliver immediate CO₂ reductions using existing vehicles and infrastructure. Europe already has a large LPG vehicle fleet and refuelling infrastructure serving millions of consumers, which can be progressively decarbonised through the uptake of renewable liquid gases without disruptive system changes. Clear and credible market signals - including regulatory certainty and the continued presence of internal combustion engine vehicles on the market - are essential to unlock investment and scale up renewable liquid gas production in the EU. Without such certainty, investment decisions risk being delayed, slowing down cost-effective emissions reductions that are already available today.

At the same time, the effectiveness of the proposal will depend entirely on how the framework is designed and implemented.

Based on the information currently available, the contribution of renewable fuels appears to be limited by a 3% cap and only from 2035. If confirmed, such limitations would significantly constrain their real impact, undermining the principle of technological neutrality and preventing renewable fuels from contributing proportionately to Europe's decarbonisation objectives.

In addition, the announced proposal does not seem to introduce a dedicated vehicle category for carbon-neutral fuels (CNF). The absence of such a vehicle class would create regulatory uncertainty and risks disadvantaging vehicles running on renewable liquid and gaseous fuels, despite their proven ability to deliver real and immediate emissions reductions in line with EU climate targets.

While the announced proposal would allow plug-in hybrids, range extenders, mild hybrids and internal combustion engine vehicles to remain on the market beyond 2035, this flexibility remains highly conditional. The regulatory framework must therefore be sufficiently clear, workable and genuinely technology-neutral to ensure that these pathways can effectively contribute to emissions reductions.

"The Commission's announcement sends an important signal by recognising renewable fuels, but recognition must translate into a framework that works in practice," said Ewa Abramiuk-Lete, General Manager of Liquid Gas Europe. "Renewable fuels are a proven solution for decarbonization of mobility in the EU; to stimulate investment in renewable liquid gases and other low-carbon solutions, the rules must allow them to contribute at scale, avoid unnecessary constraints, and provide long-term market certainty."

As the legislative process moves forward, Liquid Gas Europe will engage with EU institutions and partner organisations to advocate for a framework that:

• enables renewable fuels, including renewable liquid gases, to contribute proportionately to CO₂ reduction targets from the early implementation stage;
• avoids arbitrary caps that limit effective and available solutions;
• provides clear regulatory recognition for vehicles using carbon-neutral fuels; and
• supports European production, investment and energy security.