In a significant policy reversal, the European Union has stepped back from its flagship plan to ban the sale of new petrol and diesel cars by 2035. Instead of enforcing a strict zero-emissions mandate, the bloc will now require car manufacturers to cut exhaust emissions by 90%.
A Major Concession to Industry Pressure
The European Commission confirmed the climbdown, which marks the EU's most substantial retreat from its green agenda in recent years. The original rules demanded that all new cars and vans sold from 2035 produce zero tailpipe emissions. Under the new proposal, the target shifts to a 90% reduction in CO2 emissions from 2021 levels.
This change allows for the continued sale of some combustion-engine models beyond the 2035 deadline, including plug-in hybrids. The decision follows intense lobbying from major automotive nations like Germany and Italy, and from Europe's car giants themselves. They argued that the industry is grappling with softening consumer demand for electric vehicles and fierce competition from cheaper Chinese imports.
New Rules and Offsetting Mechanisms
The revised framework introduces several key modifications designed to ease the transition for manufacturers. Automakers will be permitted to offset the remaining 10% of emissions by utilising specific technologies and materials. These include:
- Lower-carbon steel produced within the EU.
- Synthetic e-fuels.
- Non-food biofuels derived from sources like agricultural waste or used cooking oil.
Furthermore, the Commission has proposed easing interim targets. Carmakers would have a three-year window, from 2030 to 2032, to cut car CO2 emissions by 55% from 2021 levels. The 2030 target for vans would also be softened, moving from a 50% to a 40% reduction.
Reaction and Risks to Green Goals
The policy shift has sparked a sharp debate. Supporters view it as a necessary compromise to safeguard European jobs and industrial competitiveness. "Moving from a clear 100% zero-emissions target to 90% may seem small, but if we backtrack now, we won't just hurt the climate. We'll hurt Europe's ability to compete," warned Michael Lohscheller, CEO of Swedish EV maker Polestar.
Clean transport advocates have been highly critical. William Todts, executive director of Transport & Environment (T&E), stated, "Clinging to combustion engines won't make European automakers great again." He argued the EU is merely playing for time while China accelerates its lead in the electric vehicle market.
The proposal arrives amidst a challenging period for the global EV sector. It follows Ford Motor's announcement of a $19.5 billion writedown as it scales back electric models, citing policy shifts in the US and weaker demand. European groups like Volkswagen and Stellantis have similarly flagged soft EV sales and lobbied for lower penalties for missing targets.
Additional Measures and Next Steps
Alongside the revised targets, the Commission outlined plans to boost EV adoption in corporate fleets, which account for roughly 60% of new car sales in Europe. National targets for 2030 and 2035 would be set based on GDP per capita, with individual countries deciding how to meet them.
A new regulatory category for small, affordable electric vehicles made in the EU was also proposed, which would be subject to lighter rules and could earn extra credits towards CO2 targets. The entire package of measures still requires formal approval from EU governments and the European Parliament before it can become law.
