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Berlin wanted looser emissions rules. Paris wanted a tighter label. On Friday, each got what it came for, and Chinese carmakers are the obvious pressure point.

The joint position limits the label to the EU's 27 member states. A handful of close partners, such as Britain and Norway, could opt in under conditions, according to AFP. That's narrower than the European Commission's March proposal.

A car would also need to meet thresholds that tighten over time, including a research and development requirement, per the document the South China Morning Post reviewed.

Only vehicles that clear the bar could be bought, leased or rented with public subsidies or purchased by public authorities, EU observer reports. Think company fleets, city buses and state-backed leasing schemes.

Industry insiders told the SCMP this would push Chinese carmakers to invest in production inside the bloc rather than import finished cars.

France agreed to loosen emissions rules for carmakers, a long-standing German demand, and the pair backed softening the EU's effective 2035 ban on new combustion-engine cars, Euronews reports.

France had argued the Commission's definition was too loose because it stretched 'European origin' to dozens of trade partners. Germany, long wary of EU-European rules, shifted as its car industry shed jobs.

Other member states and the European Parliament still have to decide whether to back it, and Belgium has favoured a looser "Made with Europe" approach.