EU Reverses 2035 Ban on New Petrol and Diesel Cars Amid Auto Industry Crisis

The European Union has retracted its ambitious 2035 ban on new petrol and diesel cars, a decision announced on December 16 that has drawn criticism from environmental groups. The change comes as the bloc shifts its focus towards revitalizing its struggling auto sector, which has faced intense competition from China and slower-than-expected adoption of electric vehicles (EVs). Under the revised proposals, automakers will now be required to reduce exhaust emissions from new vehicles by 90% compared to 2021 levels, a decrease from the original plan of a complete 100% reduction. EU's industry commissioner, Stéphane Séjourné, defended the new plan as a balance between protecting the environment and supporting the auto industry, stating that the EU's green ambitions remain intact. Originally adopted in 2023, the combustion-engine ban was viewed as a significant achievement in fighting climate change. However, persistent lobbying from car manufacturers and their supporters led to the EU's decision to ease the restrictions. This latest move is seen as part of a broader pro-business trend in which the EU has relaxed several environmental regulations under the pretext of fostering economic growth. Even with the new measures, automakers will still be permitted to sell a limited number of polluting vehicles, from plug-in hybrids to standard diesel cars, even after the 2035 deadline. However, they will need to offset the emissions from these vehicles using carbon credits. This includes credits generated through the use of low-carbon steel manufactured in Europe and is tied to an annual quota of e-fuels and biofuels available from energy companies. As the auto industry has faced numerous challenges, including job cuts and factory closures, it argued that the 2035 target was increasingly unrealistic. The high upfront costs of EVs and the inadequacy of charging infrastructure in some regions of the 27-nation bloc have contributed to a slow uptake of electric vehicles among consumers. Reported figures indicate that in the first nine months of 2025, only 16% of new vehicles sold were electric. Manfred Weber, the leader of the EU Parliament's largest group, supported the new target, arguing that prohibiting certain technologies could fuel far-right populism. In contrast, several critics, including representatives from Spain, France, and Nordic countries, cautioned that abandoning the ban could undermine the EU's green objectives, slow down the shift to EVs, and deter investments in electrification. Alongside the new emissions targets, the EU Commission rolled out additional measures aimed at bolstering the auto sector, pending approval from the EU Parliament and member states. These include potential 'super credits' for small, affordable electric cars manufactured in Europe and a reduction in the interim 2030 emission target for vans from 50% to 40%. Furthermore, truck manufacturers may be granted more time to meet their goals in light of previous concessions. To encourage the adoption of greener vehicles, medium and large firms, which account for about 60% of new car sales, will be required to gradually switch to greener fleets. Each country will have specific targets, with more stringent obligations for wealthier nations. It is notable that road transport constitutes approximately 20% of total greenhouse gas emissions in Europe, with cars responsible for 61% of those emissions. The upcoming changes in EU regulations reflect a challenging balance between advancing environmental goals and supporting a critical sector of the economy in disarray. Related Sources: • Source 1 • Source 2 • Source 3