EU Revises 2035 Internal Combustion Engine Phase-Out Plan
Germany and Italy, Major Automotive Nations, Push Back
Environmental Groups Warn: "Europe's Competitiveness Could Be Undermined"
The Financial Times (FT) reported on December 15 (local time) that the European Union (EU) is considering easing its plan to completely ban the sale of internal combustion engine vehicles, which was originally set to take effect in 2035.
The European Commission is expected to propose a related amendment to the law on December 16. The amendment is anticipated to allow automakers to continue producing internal combustion engine vehicles after 2035, up to a maximum of 10% of their 2021 emissions levels. This means that car manufacturers would be able to keep producing a limited number of gasoline and diesel vehicles. However, there is a possibility that additional conditions, such as the use of eco-friendly steel, may be imposed.
In addition, there are ongoing discussions about allowing small range-extending engines in electric vehicles, which were previously set to be banned after 2035.
FT noted that these conditions have not yet been finalized and that, for the amendment to become law, it must be approved by both EU member states and the European Parliament.
The 2035 ban on internal combustion engine vehicles has been regarded as a symbolic policy of the EU's climate action law. However, the automotive industry has strongly opposed the measure, arguing that the growth in demand for electric vehicles (EVs) has been slow and that charging infrastructure remains insufficient.
Major member states where the automotive industry is a leading sector, such as Germany and Italy, have also expressed critical views. German Chancellor Friedrich Merz recently stated, "There will still be millions of internal combustion engine vehicles worldwide in 2035, 2040, and even 2050," expressing his support for easing the regulations.
This policy shift by the EU could also put pressure on the UK Labour government. The UK has previously announced that it will maintain its existing policy of converting all new car sales to electric vehicles starting in 2035.
The European Commission brought forward the scheduled review of the relevant regulations, originally planned for next year, in response to industry pressure, but has refrained from making any official comments on the ongoing discussions.
Environmental groups warn that this regulatory relaxation could actually weaken Europe's competitiveness. Simone Tagliapietra, senior fellow at the Belgian think tank Bruegel, said, "Since the transition to electric vehicles is the future of the automotive industry, this will do little to help car manufacturers and will seriously damage what remains of Europe's reputation as a global climate leader."
Global automakers such as BMW, Renault, and Stellantis have argued that the transition to electrification is progressing more slowly than expected, and that the low profitability of electric vehicles is increasing the burden on the industry.
Thomas Schaefer, CEO of the Volkswagen brand, said in Barcelona, "There is no doubt that electric vehicles are the future of the industry," but emphasized that "flexibility is needed in the transition process, taking into account market and consumer demand."
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