European U-turn on 2035 combustion ban! But it’s not all good news for car-makers hoping to save petrol and diesel-engines
The European Commission has retreated from aggressive plans to ban all new combustion engine cars from 2035.
The move comes following intense pressure from both member states and car-makers operating within the region.
The retreat that still needs sign-off from EU governments and the European Parliament, will now see brands continue to sell some petrol-powered models beyond 2035.
It will have huge global implications, almost certainly prolonging the life of combustion engines and hybrids in markets like Australia.
Not that it has been a total victory for the likes of Volkswagen, Renault, Mercedes, BMW and the Stellantis group and countries like France and Germany that all lobbied hard to scrap the 2035 ban.
While petrol and diesels can still be sold, the new proposals require CO2 emissions to be slashed by a considerable 90 per cent compared to 2021 levels.
That’s only a 10 per cent drop compared to the previous 100 per cent requirement, which effectively banned all non-EVs from 2035.
The Commission says as part of its revised plan it will allow both pure combustion and hybrid-powered cars to be sold beyond 2035.
But some analysts suggest most car-makers will have to embrace high levels of electrification to achieve the 90 per cent reduction.
Helping appease powerful environment groups, European legislators say that the 10 per cent deficit must be offset with the use of biofuels, e-fuels and new European-made low-carbon steel.
It has yet to detail how the extensive use of green steel in manufacturing will help car brands offset their emissions, but it’s thought the Commission might dish out credits that will permit manufacturers to continue to build higher polluting models.
Incentivising automakers to continue to invest heavily in small electric cars, the Commission will roll out new M1E regulations that award super credits to manufacturers that will go further to reduce fleet average emissions.
Speaking of which, if a car-maker misses out on the 90 per cent reduction in emissions, the Commission has already confirmed that fines for failure to comply could ramp up into the billions.
Dig deeper into the new proposed watered-down regulations and there are other interesting details that could still bring a premature end to the sale of petrol and diesel vehicles.
This includes a proposal that would see EU member states introduce stiffer zero-emission CO2 targets for company cars and vans.
In future, countries like France and Germany will decide what specific share of cars bought up by large corporations will be zero emission, with a deadline set to be imposed as soon as 2030.
If regions go ahead and dictate that a huge proportion of corporate sales must be zero-emission the fate of the combustion engine could once again hang in the balance.
Currently in Europe, as much as 60 per cent of all vehicles sold are bought with company money, with some markets attributing even higher proportions to company sales.
If that’s the case, brands might find it harder than ever to justify developing combustion-powered derivatives for a small minority of buyers.
The reason for focusing on company users, rather than private buyers, is the former generally cover far higher annual mileages.
Proposed bans of combustion-powered vehicles in some large European cities could also impact decisions on whether to continue to develop future petrol-powered cars and vans.
Commenting on the new proposals, European Commission president Ursula von der Leyen said:
“Innovation, clean mobility, competitiveness: this year, these were top priorities in our intense dialogues with the automotive sector, civil society organisations and stakeholders.
“And today we are addressing them all together. As technology rapidly transforms mobility and geopolitics reshapes global competition, Europe remains at the forefront of the global clean transition.”
Touted as a “lifeline for the European auto industry”, if the new laws are approved by EU members they could be brought into effect as soon as early next year.
It means all car-makers operating in the region would finally given clear guidance on what they can, or can’t make, for the next decade.
