The European Union is poised to significantly revise its planned ban on new combustion engine vehicle sales by 2035, responding to mounting pressure from automakers and, crucially, a direct appeal from German Chancellor Friedrich Merz. The shift comes as the United States also signals a loosening of fuel efficiency standards, creating a divergence in global automotive policy.
German Opposition Drives Reconsideration
Chancellor Merz, in a letter to European Commission President Ursula von der Leyen, urged the EU to maintain flexibility regarding the 2035 deadline. This intervention appears to have taken effect: the Commission has now proposed a less rigid approach, aiming for a 90% reduction in tailpipe emissions by 2035 rather than a complete ban on combustion sales. The remaining 10% reduction would rely on biofuels, synthetic e-fuels, and low-carbon steel production.
This move represents a significant concession after automakers repeatedly requested a reevaluation of the original plan. The EU had previously stood firm, but the German push, combined with economic realities, seems to have forced a change in course.
Technological Loopholes and Industry Support
The proposed revision opens the door for exceptions, including plug-in hybrids, extended-range electric vehicles, and highly efficient combustion engines beyond 2035. EU Commissioner for Sustainable Transport and Tourism, Apostolos Tzitzikostas, stated the Commission “will take all technological advances into account” when reassessing emission limits, specifically mentioning combustion engines running on sustainable fuels.
Companies like BMW are already leveraging biofuels, such as HVO 100 (derived from vegetable oils), to reduce emissions by up to 90% compared to conventional diesel. Porsche also invests heavily in synthetic fuel production, including a plant in Chile operational since 2022. These developments provide a pathway for continued combustion engine sales under the revised framework.
Broader Context: US Policy Divergence
The EU’s shift occurs alongside the Trump administration’s decision to ease CAFE (Corporate Average Fuel Economy) standards in the United States. This move effectively lowers mandatory fuel economy requirements for 2031 and beyond, signaling a contrasting approach to automotive regulation.
The diverging policies highlight a key trend: major economies are reevaluating aggressive decarbonization targets in light of economic pressures and technological realities. The EU’s move, while less drastic than an outright reversal, acknowledges the industry’s concerns and the potential role of alternative fuels in reducing emissions.
The European Commission will meet on December 10 to finalize proposals aimed at supporting the struggling automotive sector. While an immediate announcement may be delayed, the direction is clear: the 2035 combustion engine ban is no longer set in stone.
