It was one of the flagship measures of the “Green Deal,” a deadline once presented as non-negotiable to put an end to internal combustion engines in the name of credibility on climate targets.
That deadline has now collapsed. After intense pressure from manufacturers on European decision-makers, carmakers will be allowed to continue selling new vehicles equipped with combustion or hybrid engines—provided they comply with certain requirements, notably the offsetting of CO₂ emissions generated by these “flexibilities,” the European Commission said.
Europe was already being outpaced by China in the race for electric vehicles; this backtracking only worsens the picture. Still, the European Union (EU), by rowing back on its 2035 ambitions, is not abandoning its climate policy. Rather, it is taking what it calls a “pragmatic” turn in response to the turmoil facing the automotive industry, argued European Commissioner Stéphane Séjourné.
He maintained that “the objective remains the same; these flexibilities are pragmatic realities given consumer uptake and the difficulty manufacturers face in offering 100% electric vehicles on the market by 2035,” he added.
The planned phase-out of combustion engines from 2035 was the cornerstone of the European Green Deal, designed to support the EU’s path toward carbon neutrality by 2050. But Chinese competition across all segments, combined with trade tensions with the United States, has battered European manufacturers. Environmental constraints are gradually being loosened and barriers are falling one by one, in the name of business. The climate, it seems, will have to wait.
As a result, the outright ban on new combustion-engine cars in 2035 is off the table. Instead, manufacturers will be required to cut CO₂ emissions from their sales by 90% compared with 2021 levels and offset the remaining 10%. The framework is complex and convoluted, but Brussels insists the sector will be fully decarbonized by that date. How? Wait and see.
European brands had been pushing for “flexibilities” for months to pull themselves out of a sales slump, while Chinese competitors—especially BYD—continue to capture growing market share, notably in electric models with unbeatable prices. The battle between the Commission and member states was fierce; in the end, industrial interests prevailed.
Germany and Italy, whose vehicles are more polluting, campaigned for “technological neutrality,” meaning the continuation of combustion engines beyond 2035. To compensate, they proposed lower-CO₂ technologies (plug-in hybrids, electric vehicles with range extenders, and the like) and the use of alternative fuels.
On the other side, France and Spain pressed the EU to deviate as little as possible from the 2035 horizon, to avoid undermining the all-electric momentum and derailing the expansion of electric vehicle batteries. The Commission therefore attempted to split the difference, unveiling on Tuesday a package of measures to support the sector’s electrification.
These include strong incentives to “green” corporate fleets—which would boost demand for electric vehicles—and zero-interest loans for battery manufacturing. In addition, the Commission wants to accelerate the development of small electric vehicles at “affordable” prices, a plan outlined last September by Ursula von der Leyen, with a clear objective: “not to let China and others capture this market.”
Easier said than done—the Chinese “worm” is already deep inside the European fruit.
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