The European Commission is poised to reconsider its previously established ban on the sale of fossil-fuel vehicles by 2035, responding to pressure from the automotive sector. As part of this revision, the Commission may permit the sale of plug-in hybrids and range extenders powered by biofuels or synthetic fuels. Following the 2035 deadline, manufacturers will be allowed to sell a limited number of new vehicles with internal combustion or hybrid engines, contingent upon meeting specific conditions, including the requirement to offset CO2 emissions associated with these exemptions.
Stéphane Séjourné, the European Commissioner for Industrial Strategy and Prosperity, commended the EU’s pragmatic approach in addressing the challenges faced by the automotive industry.
This impending revision of the ban on internal combustion engine automobiles was initially a cornerstone of the European Green Deal, which aims to help the EU achieve carbon neutrality by 2050. However, amid competitive pressures from China and trade tensions with the United States, Europe has recently postponed or refined several environmental initiatives, marking a strategic shift towards a pro-business stance.
The European Commission has revised its approach to the planned ban on new internal combustion engine vehicles by 2035. Rather than an outright prohibition, manufacturers will now be required to reduce CO2 emissions from their vehicle sales by 90% compared to 2021 levels, while offsetting the remaining 10%. This adjustment aims to ensure that the automotive sector achieves complete decarbonisation by the established deadline.
Initially, the Commission sought to eliminate the production of all non-zero emission vehicles by 2035. The updated directive permits 10% of vehicle production to continue using traditional fuel sources. Additionally, automotive manufacturers are advocating for modifications to the interim targets set for 2030, citing various market conditions.
While this change may appear minor, critics express concern that it could impede Europe’s transition to electric vehicles and allow Chinese manufacturers to further capture market share both in Europe and globally. Michael Lohscheller, CEO of Swedish electric vehicle manufacturer Polestar, has highlighted these concerns, suggesting that the policy shift may undermine the progress being made in electric vehicle adoption.
The motivations behind this revised approach include fears of losing additional market share to Chinese EV manufacturers, who have been increasingly successful in Europe despite the recent European Union tariffs. German automakers, in particular, have been vocal in advocating this policy change, expressing dissatisfaction with declining returns in both China and their domestic market. Furthermore, companies such as Volkswagen and Stellantis have cited low demand for electric vehicles as a rationale for moderating the ban.
