European Union Modifies Strategy to Phase Out New Petrol and Diesel Car Sales by 2035

The European Commission has revised its strategy concerning the prohibition of new petrol and diesel automobile sales by the year 2035. Initial regulations mandated that all newly sold vehicles be ‘zero emissions’ from that date onward. However, significant lobbying efforts, particularly from the German automotive sector, have prompted a push for revised terms.

Under the updated proposal, 90% of newly sold vehicles must be zero-emission. This marks a shift from the original requirement of 100%. According to the European automobile manufacturers association, ACEA, the current market appetite for electric vehicles remains insufficient, leading manufacturers to face potential ‘multi-billion euro’ fines if rules remain unchanged.

The remaining 10% of new vehicle sales could still include traditional petrol or diesel options, in addition to hybrid models. Moreover, automakers will be required to incorporate low-carbon steel produced within the EU into their manufacturing processes.

Expectations for Biofuels and E-Fuels

The Commission is also counting on an uptick in the use of biofuels and e-fuels—fuels synthesized from captured carbon dioxide—to offset the additional emissions generated by petrol and diesel vehicles. Critics of this adjusted plan warn that it could hinder the transition to electric vehicles and expose the EU to heightened foreign competition.

The environmental advocacy group T&E has cautioned that the UK should not emulate the EU’s approach by diluting its own strategy to phase out conventional vehicles under the Zero Emission Vehicles Mandate. Anna Krajinska, director of T&E UK, emphasized, ‘The UK must remain resolute. Our ZEV mandate is already fostering job creation, investment, and innovation in the UK. As significant exporters, we must innovate, especially as global markets rapidly shift toward electric vehicles.’

Calls for Flexibility and Incentives

Before the announcement was made, Sigrid de Vries, the director general at ACEA, expressed the urgent need for ‘flexibility’ for manufacturers. She stated, ‘With 2030 approaching, market demand is too low, risking multi-billion euro penalties for manufacturers. Adequate time is necessary to establish charging infrastructure and introduce fiscal incentives to align the market.’

Carmakers in the UK have previously advocated for improved incentives to motivate consumers to transition to electric vehicles ahead of the government’s anticipated ban on new petrol and diesel vehicle sales by 2030. Companies globally are revamping production lines and investing vast sums as governments push for greener driving solutions to meet environmental goals.

Industry Perspectives on Electric Transition

Volvo has highlighted its achievement of constructing a comprehensive electric vehicle portfolio in under a decade, asserting readiness to fully embrace electric technology while using hybrids as a transitional step. The company remarked, ‘If we can phase out petrol and diesel vehicles, others should be capable of doing the same.’

Additionally, Volvo cautioned that weakening long-term commitments for short-term gains could jeopardize Europe’s competitive edge for years. ‘An ambitious and consistent policy framework, along with investments in public infrastructure, is essential to deliver tangible benefits for consumers, the climate, and Europe’s industrial strength.’

In contrast, German automaker Volkswagen has expressed support for the European Commission’s draft proposal regarding new CO₂ targets, deeming it ‘economically viable overall.’ The company noted, ‘The special support for small electric vehicles is a very positive development. It is crucial to make CO₂ targets for 2030 more flexible for passenger cars while adjusting them for light commercial vehicles.’

Colin Walker, head of transport at the Energy and Climate Intelligence Unit (ECIU), remarked that stable government policies would instill confidence in companies to invest in charging infrastructure and prevent jeopardizing investments. He referenced Sunderland’s selection for Nissan’s original electric Leaf production as a testament to effective government policy.

Fiona Howarth, CEO of Octopus Electric Vehicles, warned that if the UK were to lower its ambitions due to changes in Brussels, it would convey a damaging message to investors, manufacturers, and supply-chain partners. Many of these stakeholders have already committed substantial investments based on the expectation that the UK would maintain its course.