A significant shift in European climate policy is underway, as the European Commission has formally retreated from its previously staunch commitment to a complete ban on internal combustion engine vehicles by 2035. The revised proposal, unveiled Tuesday, introduces a loophole allowing automakers to meet a reduced emissions reduction target of 90% instead of the initial 100%.
This strategic backtrack, ostensibly intended to facilitate a more realistic transition to electric mobility, has already drawn criticism from environmental advocacy groups who accuse the Commission of succumbing to lobbying pressure from the automotive industry. The remaining 10% of emissions can now be offset by utilizing low-carbon steel produced within the EU, or through the adoption of e-fuels and biofuels, effectively allowing plug-in hybrids (PHEVs), vehicles with range extenders, mild hybrids and conventional combustion engine vehicles to remain on the roads beyond 2035 alongside fully electric vehicles (EVs) and hydrogen-powered alternatives.
The concessions extend beyond passenger vehicles. A reduction in the CO2 target for vans has been proposed, lowering it from 50% to 40% by 2030. Furthermore, the Commission suggests a more “flexible” approach to CO2 emission standards for heavy-duty vehicles, raising concerns about the overall ambition of the EU’s decarbonization efforts across the transport sector.
While the proposal includes measures to incentivize the adoption of cleaner vehicles within corporate fleets – mandating member states to set binding targets for large companies – critics argue these targets lack the teeth to drive meaningful change. Notably, access to public funding will be tied to the acquisition of low-emission vehicles and vehicles bearing the “Made in the EU” quality mark, a move seen as a potential protectionist measure alongside pushing for a localized battery supply chain.
To bolster the domestic battery industry, the EU is allocating €1.8 billion, with €1.5 billion channeled through zero-interest loans to European battery cell manufacturers. This initiative, while intended to secure a sustainable and independent battery supply chain for the EV transition, has also been questioned as a potential misallocation of resources that could be better invested in broader decarbonization technologies. The revised policy presents a complex balancing act, demonstrating the ongoing political and economic pressures shaping Europe’s climate ambitions and raising fundamental questions about the speed and scope of the continent’s transition to sustainable mobility.