EU lawmakers reach compromise on emissions and end to new petrol and diesel car sales

01 July 2022


The 2035 phase-out of new internal-combustion engine (ICE) car sales has been endorsed by EU lawmakers. Environmental ministers from across the EU managed to reach a compromise after 16 hours of negotiations.

The agreement sets the baseline for how member states will negotiate the final law with the European Commission and the EU parliament. Under the Fit-for-55 package, the bloc is aiming for a 55% emissions reduction for cars and 50% for vans compared to 2021 levels by 2030, and climate neutrality in 2050.

Full confidence in the industry

This compromise means that it is even more likely that the Fit for 55 package will be written into EU law. This means automotive companies only have a few years to fully switch their fossil-fuelled approach to mobility to one powered by electricity and other alternatives like hydrogen.

‘I have full confidence that the European car industry can manage,’ Frans Timmermans, the commission’s executive vice president told ministers as the talks came to a close. ‘Our carmakers are among Europe’s industrial leaders and can continue that as they embraced this global shift.’

The turn to electromobility is irreversible. It is the only ecologically, technologically and economically sensible way to replace combustion engines as quickly as possible,’ a Volkswagen Group spokesperson emphasised to Autovista24. ‘From 2035, no new vehicles with combustion engines will be allowed to be registered in the EU. An ambitious but achievable goal.’

As the automotive group electrifies its line-up, it outlined the need for political goals to be underpinned by appropriate measures across the bloc. This includes an adequate supply of battery cells, a much faster expansion of the charging infrastructure, and an accelerated energy transition.

A Mercedes-Benz spokesperson told Autovista24 that the carmaker welcomes the decision in principle. ‘The Mercedes-Benz strategy is clear: our focus is on battery-electric vehicles. By 2030, we are ready to go fully electric wherever market conditions allow.’

Excluding the Smart, Mercedes-Benz has seven all-electric models, offering battery-electric vehicles (BEVs) in all its active segments this year. But it emphasised the need for greater charging support. ‘The decisive factor now is the development and expansion of the charging infrastructure,’ they said.

Stark warning

Looking to leave ACEA by the end of the year, a representative from Stellantis issued an even stronger caution. Arnaud Deboeuf, the carmaker’s chief manufacturing officer, warned that unless electric vehicles (EVs) become more affordable ‘the market will collapse,’ Bloomberg reported.

He confirmed that Stellantis is looking to lower the cost of manufacturing EVs by 40% come 2030. With inflation rising and governments considering the use of purchase incentives, any savings which can be passed over to list prices will surely help improve rates of electric uptake.

While electrification does appear to hold merit for lowering emissions, there are concerns within the industry that this transition will not only cost a lot of money but a lot of jobs. BEVs do not require the same number of people working on production lines, owing to the smaller number of parts. There is also the issue of which plants can be refitted to support these models and their production process.

Carving out a compromise

The negotiations saw Italy drop demands for a five-year delay within the EU’s emissions-regulation plans. Alongside four other members, the country had hoped for a 90% vehicle-emission reduction by 2035, as well as a longer exemption for small manufacturers. It did secure some allowances, with specialist manufacturers such as Lamborghini, no longer facing interim targets for 2029; they now have until 2035.

Looking to carve out a compromise, Germany proposed an addition to emissions regulations. This calls on the commission to propose registering vehicles using exclusively carbon-neutral fuels after 2035, potentially enabling their continued use.

This was a concern for some environmental groups like Transport and Environment (T&E). It argues that e-fuels emit significantly more CO2 than battery-electric vehicles BEVs over their lifetime and as much NOx as petrol vehicles.

‘The end of the combustion engine is great news for the climate. But new proposals on fuels are a diversion. Let us not waste any more time on e-fuels for cars and vans and instead focus on rolling out charging, re-skilling workers for the electric transition and responsibly sourcing material for batteries,’ said Julia Poliscanova, senior director for vehicles and emobility at green group T&E.

Raw materials, affordability and other challenges

The news should not come as a huge shock for carmakers given the Fit for 55 package was proposed nearly a year ago. The EU hopes to regulate a more sustainable way of life, with transportation an important factor. While many automotive companies appeared accepting of the news, having already begun to electrify their model portfolios, concerns have been voiced over the supply of essential materials.

‘To be very clear: the automobile industry will fully contribute to the goal of a carbon-neutral Europe in 2050,’ said Oliver Zipse, European Automobile Manufacturers’ Association (ACEA) president and CEO of BMW.’ But the decision of the Council raises significant questions which have not yet been answered, such as how Europe will ensure strategic access to the key raw materials for e-mobility.’

He explained that for the bloc to be at the front of sustainable mobility, the availability of these materials must be secured. If not, the region could end up with new dependencies, given how other countries positioned themselves from an early stage.

The European association of automotive suppliers (CLEPA), noted the decision shuts the door on the internal-combustion engine as of 2035, but with space left to consider renewable fuels. ‘We are glad to see support from the Council for vehicles running on renewable fuels,’ said CLEPA’s secretary-general Sigrid de Vries. ‘Whereas we will see a vast deployment of electric vehicles, there are practical, ready-to-use solutions available for hybrid vehicles, as well as for the existing cars, vans and trucks on the road, which so far have not found sufficient political support.’

She commented that the decision confirms a required substantial transformation for the sector at a rapid pace. However, there is a need for support from policymakers, especially when it comes to charging infrastructure, as well as the production of renewable power.

‘Criteria such as affordability, access to raw materials, emissions along the life cycle and employment in the sector need to be considered. The ambitious electrification targets can only be met if the framework conditions are in place,’ she added.