The European Commission is expected tomorrow to roll back the EU’s effective ban on the sale of new combustion-engine cars from 2035, amid strong pressure from Germany, Italy and European carmakers facing stiff competition from Chinese and US rivals.
The change, with details still being finalised by EU officials ahead of its announcement, could see the ban delayed by five years or diluted indefinitely, according to official and industry sources, reports RTE.
Such a revision to the 2023 law requiring all new cars and vans sold across the 27-member bloc from 2035 to be CO2 emission-free would mark the European Union’s biggest retreat from its green agenda in the past five years.
“The European Commission will be putting forward a clear proposal to abolish the ban on combustion engines,” said Manfred Weber, leader of the European Parliament’s largest grouping, the European People’s Party. “It was a serious industrial policy mistake”, reports RTE.
The prospect of scrapping the ban has split the automotive sector. Established manufacturers such as Volkswagen and Fiat-owner Stellantis have lobbied strongly for looser targets, citing intense competition from cheaper Chinese rivals. However, companies focused on electric vehicles argue this would hand China an even greater advantage in the shift to electrification.
“The technology is ready, charging infrastructure is ready, and consumers are ready,” said Polestar CEO Michael Lohscheller. “So what are we waiting for?”, reports RTE.
The 2023 legislation was intended to speed up the transition away from combustion engines towards battery or fuel-cell vehicles, with penalties for automakers that failed to meet emissions targets.
Complying with those targets requires higher sales of electric vehicles, an area where European manufacturers trail behind Tesla and Chinese firms such as BYD and Geely, reports RTE.
European carmakers are producing EVs but say demand has fallen short of expectations, with consumers hesitant due to higher costs and limited charging infrastructure. Tariffs imposed by the EU on Chinese-made EVs have only marginally eased competitive pressure.
“It’s not a sustainable reality today in Europe,” Ford CEO Jim Farley told reporters in France last week, as he announced a partnership with Renault aimed at cutting EV costs. He said industry needs were “not well balanced” with EU CO2 targets, reports RTE.
In March, the EU gave the car industry some “breathing space” by allowing manufacturers to meet 2025 emissions targets over a three-year period.
However, automakers want continued permission to sell combustion-engine vehicles alongside plug-in hybrids, range-extender EVs and vehicles running on so-called CO2-neutral fuels, including biofuels made from agricultural waste and used cooking oil, reports RTE.
Commission President Ursula von der Leyen said in October that she was open to the use of e-fuels and “advanced biofuels”.
“We recommend a multi-technology approach,” said Todd Anderson, chief technology officer at combustion-engine fuel systems firm Phinia, adding that the internal combustion engine will “be around for the rest of the century”, reports RTE.
The electric vehicle industry, meanwhile, warns that weakening the ban would damage investment and push the EU even further behind China.
“It’s definitely going to have an effect,” said Rick Wilmer, CEO of charging hardware and software company ChargePoint, reports RTE.
Automakers are also seeking changes to the 2030 target requiring a 55% reduction in car emissions, calling for it to be phased in over several years, and want the 50% reduction target for vans scrapped. Germany has argued that sustainable practices such as using low-carbon steel should count towards emissions reductions.
The European Commission is also expected to outline measures to increase the share of EVs in corporate fleets, particularly company cars, which account for around 60% of new car sales in Europe, reports RTE.
The auto industry has called for incentives rather than mandatory targets, citing Belgium as an example where subsidies have proven effective.
The Commission is likely to propose creating a new regulatory category for small electric vehicles, which would benefit from lower taxes and earn additional credits towards meeting CO2 targets, reports RTE.
Environmental groups argue the EU should stick with its 2035 deadline, saying biofuels are scarce, not genuinely CO2-neutral and too costly to scale.
“Europe needs to stay the course on electric,” said William Todts, executive director of clean transport advocacy group T&E. “It’s clear electric is the future”, reports RTE.
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