EU Moderate 2035 Ban on Combustion Engine Vehicles Amid Industry Pressure

The European Union has announced a significant softening of its landmark ban on the sale of new petrol and diesel cars, initially set for implementation by 2035. This decision comes in response to heavy pressure from the automotive industry and key member states, particularly Germany and Italy. Under the existing legislation, manufacturers were required to ensure that 100% of their production of cars and vans had zero emissions by 2035. However, on Tuesday, the European Commission confirmed that this target will now be adjusted to 90%. This alteration will facilitate the continued manufacturing of certain plug-in hybrid electric vehicles (PHEVs) and even some combustion engines beyond the 2035 deadline. In a strategy that blends incentives with regulatory measures, the remaining 10% of production that does not meet carbon-neutral standards must be offset by other eco-friendly initiatives on the production line. These may include the integration of green steel made in Europe or the utilization of biofuels in non-electric vehicles. This change allows for various alternatives, such as plug-in hybrids, range extenders, mild hybrids, and traditional internal combustion engine vehicles, to coexist alongside fully electric vehicles (EVs) and hydrogen-powered options. The Commission has also revised goals for electric vans, decreasing the carbon emissions reduction target from 50% by 2030 to 40%. This policy revision, which follows lobbying efforts from German Chancellor Friedrich Merz and Italian Prime Minister Giorgia Meloni, is perceived as a win for the European car industry—one that has found the transition to electric vehicles challenging amid intensifying competition from Chinese automotive manufacturers. This anticipated decision has attracted criticism from the Green Party in the European Parliament, which argues that it represents a substantial dilution of key legislation designed to reduce emissions across Europe. European Commission President Ursula von der Leyen, a proponent of the green deal and significant emissions regulations introduced in 2022, asserted that Europe will continue to lead in the global shift towards clean energy. She noted that the proposals, which still require approval from the European Parliament, were developed following extensive discussions with automotive sector representatives, civil society organizations, and other stakeholders. In a broader framework of measures introduced in Strasbourg, the Commission also unveiled new incentives aimed at manufacturing smaller vehicles—currently the most popular category in Europe. Car manufacturers will benefit from 'super credits' for producing inexpensive electric vehicles, where each vehicle will count as 1.3 cars against EU quotas, allowing companies to accumulate emissions allowances. Furthermore, initiatives to boost electric vehicle sales among large corporate buyers were outlined, recognizing commercial fleets as a crucial component in the second-hand car market and overall EV uptake. This strategy highlights the EU's ongoing commitment to fostering a greener future while responding to the practical realities faced by the automotive industry. Related Sources: • Source 1 • Source 2