The EU is backtracking and wants to eliminate the end of the combustion engine car.

BrusselsBrussels takes a historic step backward on environmental milestones. After months of pressure from industry associations and some member states with large automotive sectors, the European Commission has decided to reverse course and indefinitely postpone the ban on the sale of combustion engine cars, which was scheduled for 2035. This means companies will have to cut 90% of their emissions by 2035, with a limited number of hybrid cars and gasoline or diesel-only vehicles accounting for the remaining 10% of pollution. However, the automotive industry will be allowed to continue polluting at least 10% if it implements compensatory environmental measures. Among other conditions, brands that want to sell a limited number of combustion engine cars from 2035 onwards will have to promote the production of small, affordable electric cars, or use materials—such as steel—with a low carbon footprint in their vehicle manufacturing. This is a highly controversial legislative proposal, and the European Commission has postponed its presentation due to internal divisions within the European bloc. In any case, the reform is yet to be negotiated and voted on in the Council of the EU—the body representing the member states—and the European Parliament, where the right and far right hold a majority and have already joined forces to push through a weakening of EU environmental measures during this legislative term. It's worth remembering that this is not the first relaxation of the EU climate plan regarding the automotive sector. The European Union has also postponed for three years the entry into force of sanctions against automotive groups that do not comply with CO₂ emissions standards. These measures, scheduled to come into effect this year, required all car companies to reduce pollution by 15% compared to 2021. Vehicle manufacturers have saved approximately €16 billion in fines for excessive pollution, according to the European automotive industry association ACEA. However, car companies will have to offset any excess pollution during 2026 and 2027. Furthermore, the European Commission has also announced that it will provide €1.8 billion in interest-free financing to battery manufacturing companies and their value chains. With this initiative, Brussels aims to boost a key sector of the automotive industry and, in turn, reduce dependence on external powers, such as China, in this area.

Division among Member States

The European Commission has announced this reform at a time when the European car industry is suffering a competitiveness crisis, especially against China and with regard to electric vehicles, and claims it is unable to carry out the energy transition at the pace set by the European Union. "Europe's transformation plan for the automotive industry must go beyond idealism and take into account current industrial and geopolitical realities," argues the European Automobile Manufacturers' Association (ACEA) in a letter sent to the European Commission. Pressure from a significant number of member states has also played a decisive role in the decision of the European Commission, led by German conservative Ursula von der Leyen. One of the countries that has most insisted on delaying the ban on manufacturing combustion engine cars is precisely the continent's leading automotive powerhouse, Germany. "The reality is that there will still be millions of cars powered by combustion engines worldwide in 2035, 2040, and 2050," argued German Chancellor Friedrich Merz. Italy, another major EU car producer, also maintains this position. Going against the grain, as is becoming increasingly common, is one of the few European partners governed by the social democratic family: Spain. Last week, Pedro Sánchez sent a letter to Ursula von der Leyen urging her to avoid postponing the planned 2035 ban on combustion engine cars. The Spanish government—in line with the French, though more subdued—believes that the transition to electric vehicles must be prioritized to address a "technology with no proven effectiveness," namely combustion engines.