In a bid to reinforce Europe’s strategic resilience and support its industrial transition, the European Union has introduced two significant policy shifts: a framework for overriding patent protections during emergencies and a more flexible approach to CO₂ emission targets for car manufacturers.
Safeguarding Access to Critical Products: New Compulsory Licensing Framework
The European Parliament and Council negotiators have struck a landmark deal enabling the EU to ensure the supply of essential goods—such as vaccines, semiconductors, or therapeutics—during crises. Under the new rules, the European Commission will be empowered to issue compulsory licenses that permit the production of patent-protected items without the patent holder’s prior consent, in clearly defined cross-border emergencies.
This mechanism, designed as a last resort, will be activated only when voluntary licensing negotiations fail. It will apply strictly to non-defence-related goods and will define the license’s scope, geographical reach, and duration. Before any decision, the Commission must consult an advisory body and identify all related intellectual property rights and their holders.
While rights-holders will not be required to disclose trade secrets, they will be entitled to fair compensation, determined and scheduled by the Commission. Licensees will face strict obligations, including quantity caps and mandatory labelling of products made under the compulsory license. Failure to comply—such as exceeding production limits or unauthorized exports—could result in fines of up to €300,000 for large entities and €50,000 for SMEs.
The initiative aims to equip the EU with a swift and coordinated response tool during health or supply emergencies, without undermining intellectual property rights more than necessary.
CO₂ Emissions: Parliament Adopts Flexibility for Carmakers
In a separate move, the European Parliament has approved a targeted revision of CO₂ emission performance standards for the automotive sector. With 458 votes in favour, MEPs backed the Commission’s proposal to offer more leeway to carmakers navigating rapid technological shifts and global competition.
Starting in 2025, vehicle manufacturers will be allowed to average their CO₂ emissions over a three-year window—2025, 2026, and 2027—instead of being held to annual targets. This flexibility enables carmakers to offset years of higher emissions with better performance in subsequent years, giving them breathing room to invest in innovation and meet long-term climate goals.
Despite the adjustment, the overall EU climate ambition remains unchanged. The 15% reduction target in average CO₂ emissions from new cars and vans, compared to 2021 levels, still applies for the 2025–2029 compliance period.
Balancing Resilience with Innovation
Together, these policy measures reflect the EU’s broader effort to strengthen resilience in times of crisis while enabling industries to adapt sustainably. As Europe continues to face complex global challenges, the balance between public interest, economic competitiveness, and environmental responsibility is at the core of its legislative agenda.
References
European Parliament. (2025, May 08). CO2 emissions: EP adopts flexibility measures for carmakers. Retrieved from European Parliament – News : https://www.europarl.europa.eu/news/en/press-room/20250502IPR28225/co2-emissions-ep-adopts-flexibility-measures-for-carmakers
European Parliament. (2025, May 21). Deal on patent rules exception to ensure the supply of critical products. Retrieved from European Parliament – News: https://www.europarl.europa.eu/news/en/press-room/20250519IPR28503/deal-on-patent-rules-exception-to-ensure-the-supply-of-critical-products
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