The European Commission has scrapped its flagship plan to phase out sales of new petrol and diesel cars by 2035, following intense lobbying from carmakers worried about slowing demand for electric vehicles.
Under existing rules, all new cars sold in the EU were required to be “zero emissions” from 2035. However, the Commission's revised proposal would require only 90 per cent of new vehicles sold from that date to meet the zero-emission standard, rather than 100 per cent.
The remaining 10 percent may include conventional petrol or diesel vehicles as well as hybrids, resulting in additional measures to balance emissions.
The European Automobile Manufacturers Association (ACEA), which represents major carmakers including Germany, has repeatedly warned that demand for electric vehicles is not growing fast enough to meet current targets. It said without the changes manufacturers would face fines worth “billions of euros”.
ACEA Director General Sigrid de Vries said ahead of the announcement that greater flexibility is urgently needed.
“2030 is around the corner and market demand is so low that the risk of fines of several million euros for manufacturers cannot be avoided,” he said. “It will take time to build charging infrastructure and introduce fiscal and purchasing incentives to get the market back on track.”
As well as lower sales targets, the Commission said carmakers would be expected to increase the use of low-carbon steel produced in the EU. It also anticipates greater use of biofuels and so-called e-fuels, synthetic fuels made using captured carbon dioxide, to offset additional emissions generated by petrol and diesel vehicles.
However, critics warn the move risks slowing Europe's transition to electric vehicles and weakening its competitiveness against global rivals, particularly China and the United States.
Environment group Transport & Environment (T&E) cautioned that the UK should not follow Brussels by weakening its plans under the zero emission vehicle (ZEV) mandate.
“The UK must stand firm,” said Anna Krazinska, director of T&E UK. “Our ZEV mandate is already driving jobs, investment and innovation in the UK. As leading exporters we can't compete unless we innovate, and global markets are moving fast.”
The reaction from carmakers has been mixed. German giant Volkswagen welcomed the Commission's draft proposals, calling them “overall economically sound”.
“It is extremely important that the 2030 CO₂ targets be made more flexible for passenger cars,” the company said. “Opening the market to combustion engine vehicles while offsetting emissions is practical and in line with market conditions.”
In contrast, Volvo argued that weakening long-term commitments would harm Europe's industrial future. The Swedish carmaker said it has built a full electric vehicle portfolio in less than a decade and is ready to go fully electric, using hybrids only as a short-term transition.
“Weakening long-term commitments for short-term gains risks weakening Europe's competitiveness for years to come,” Volvo said. “A sustainable and ambitious policy framework is one that will deliver real benefits for customers, the climate and Europe’s industrial strength.”
Car makers in the UK are demanding stronger incentives to encourage drivers to switch to electric vehicles ahead of the government's planned ban on new petrol and diesel cars from 2030.
Colin Walker, head of transport at the Energy and Climate Intelligence Unit (ECIU), said policy stability is vital if the UK is to maintain investment.
“It was government policy that led to Sunderland being chosen to build Nissan's original electric Leaf,” he said. “Today, the latest Nissan EVs are rolling off production lines in the North East, securing jobs for years to come.”
Fiona Howarth, chief executive of Octopus Electric Vehicles, warned that any UK move in response to the EU changes would send a “damaging signal” to investors and manufacturers.
“Many people are already heavily invested in the assumption that Britain will remain on this path,” he said.
As governments around the world continue to push for green transport to meet climate targets, the EU's decision highlights the growing tension between environmental ambition and industrial reality, and raises fresh questions over how fast the transition away from petrol and diesel can realistically happen.
jamie young
Jamie is a senior reporter at Business Matters, with over a decade of experience in UK SME business reporting. Jamie has a degree in Business Administration and regularly attends industry conferences and workshops. When Jamie is not reporting on the latest business developments, he is passionate about mentoring budding journalists and entrepreneurs to inspire the next generation of business leaders.
