Car manufacturers based in the European Union must reduce their CO2 emissions by 90% from 2035, instead of 100% as previously required by EU law, the European Commission announced today, reversing a controversial wholesale ban on internal combustion engine (ICE) cars adopted in March 2023.
Manufacturers must compensate for the remaining 10% of their emissions by: Low carbon steel produced in the EU Alternatively, it is possible by using sustainable fuels such as electronic fuels or biofuels.
The industry will be allowed to continue producing plug-in hybrid, range extender, mild hybrid and ICE vehicles beyond 2035.
Fully electric vehicles (EVs) and hydrogen vehicles will also be encouraged, the European Commission said, with carmakers eligible to receive “super credits” for producing small, affordable electric vehicles made in the EU’s 27 countries.
“We remain firmly on course towards zero-emission mobility, but we are introducing some flexibility to help manufacturers meet their carbon targets in the most cost-effective way,” Climate Commissioner Wopke Hoekstra told reporters on Monday.
The new car package is a “win-win,” Hoekstra said, noting it allows automakers to increase flexibility while creating a major market for clean steel.
Transport Commissioner Apostolos Tsitsikostas praised the “excellent decision” to reduce the 2035 target to 90%.
“This is a clear sign that technologies other than battery electric vehicles may be on the market beyond 2035,” Tsitsikostas added, noting that consumers will have the freedom to decide which technologies they want to drive.
While some within the auto industry have called for the ban to remain in place and more investment in electrification, the majority of automakers have called on the EU to reconsider its policies, saying their businesses are at risk in the face of competition from China and the United States.
Germany, Italy and several other member states are also lobbying the EU executive branch to lift the ban, arguing that the social fabric of their economies supported by the car industry is disappearing. they claim themselves Automakers are struggling These include high energy prices, shortages of auto parts including batteries, and lack of consumer demand for electric vehicles (EVs).
According to recent media reports, German car giant Volkswagen is expected to stop manufacturing vehicles at its plant in Dresden, marking the first time in the company’s 88-year history that production has stopped in Germany.
Bulgaria, Czech Republic, Germany, Hungary, Italy, Poland and Slovakia within the EU countries It called on the European Commission to reconsider the 2035 ICE ban and consider selling hybrid cars under the law.
france and spain wanted to keep the ban in place but called on the EU executive to support domestic production.
Can flexibility and electrification go together?
Veteran European People’s Party (EPP) lawmaker Peter Riese welcomed the EU executive’s update, saying technological neutrality and climate neutrality “are compatible and need to be harmonized”.
“The future is in electromobility, and I believe that too. We should not slacken our support for electromobility, especially when it comes to expanding charging infrastructure,” Riese said.
Siegfried de Vries, secretary general of the European Automobile Manufacturers Association, a car lobby group, said the industry remained committed to decarbonisation, although “flexibility is urgently needed”.
“Car manufacturers have invested hundreds of billions of euros and brought more than 300 electric models to market. There is no question of their commitment,” De Vries said.
Mr de Vries welcomed the Commission’s flexibility to enable compliance with CO2 reduction targets for 2030 and technological neutrality from 2035 onwards.
Chris Heron, executive director of electric mobility lobby group E-Mobility Europe, regretted the European Commission’s decision, saying it created further uncertainty for investors.
“We know the future of transportation is electric,” he said. “What remains to be determined is who will build it. Any hesitation or mixed signals risks undermining the investment certainty that battery makers, manufacturers and the grid need to scale up. The message to policymakers is simple: limit ambition and give the industry transparency.”
change in mindset
The decision to ban sales of new ICE cars and vans by 2035 is part of the European Green Deal, the EU’s flagship program to achieve climate neutrality by 2050, and prompted Ursula von der Leyen to take on her first mandate as European Commission President from 2019 to 2023.
However, the wind changed with the 2024 EU elections. Green members of the European Parliament have been hit hard, with the center-right EPP and the far-right now taking over the majority, and emerging parties such as Europatriots and Sovereign Nations Europe gaining more influence over policy-making.
German lawmaker Manfred Weber, leader of the EPP, is one of many centrists to oppose a 2035 ban on ICE, arguing that it is too early for the industry to adapt to the transition.
Weber recently told German media that the EU’s intention to publish the law would “send an important signal throughout the automotive industry and secure tens of thousands of industrial jobs.”
Lars Aagaard danish minister The Commissioner for Climate, Energy and Public Works, representing Denmark’s EU Presidency, said a review of the ICE ban on cars and vans must be aligned with the 2040 climate targets.
“We will analyze the proposals from the committee and we will consider what our position will be as we look forward to becoming Danes again,” Aagaard said on the sidelines of the environment council on Monday.
The Commission’s proposal will now be negotiated between the European Parliament and the European Council. The next EU Cyprus presidency will mediate political negotiations from January 2026.
