By OLIVIA ALLHUSEN, FOREIGN NEWS REPORTER and ROB HULL, MOTORING EDITOR
The EU has backed away from its push to end petrol and diesel car sales by 2035, opting for more relaxed CO2 emissions-based targets instead of an electric-only mandate.
In a major climbdown, the European Commission confirmed car makers will no longer be forced to sell only zero-emissions vehicles, allowing some combustion-engine models to remain on sale beyond the deadline.
Manufacturers will instead be required to cut car exhaust emissions by 90 per cent - not 100 per cent - compared to 2021 levels in a shift designed to ease pressure on an industry struggling with weak EV demand and rising competition from China.
The reversal follows intense lobbying from German, Italian and European auto giants, who warn they are being undercut by cheaper Chinese imports.
Critics say the move risks gutting one of the EU's flagship climate policies, while supporters argue it is a necessary concession to protect jobs and keep Europe's car industry alive.
The move heaps fresh pressure on the UK Government to reconsider its deadline to outlaw the sales of new petrol and diesel cars, which Labour accelerated to 2030 earlier this year.
Opposition leader Kemi Badenoch has this week vowed the Conservatives would axe the 2030 ban, taxpayer-funded grants towards the purchase of EVs and binding zero emission vehicle sales targets.
The EU has backed away from its push to end petrol and diesel car sales by 2035, opting for looser emissions targets instead of a full electric-only mandate
Announcing the watered-down proposal, Commission President von der Leyen said: 'Innovation. Clean mobility. Competitiveness. This year, these were top priorities in our intense dialogues with automotive sector, civil society organisations and stakeholders.
'And today, we are addressing them all together.
'As technology rapidly transforms mobility and geopolitics reshapes global competition, Europe remains at the forefront of the global clean transition.'
President of the European Commission Ursula von der Leyen said 'Europe remains at the forefront of the global clean transition' after confirming plans to scrap the 2035 ban on petrol and diesel cars on Tuesday
The European Commissioner for Climate, Net Zero and Clean Growth, Wopke Hoekstra added: 'We want our industries to be the leaders of the transition to a low-carbon economy because that is what is best for our climate, competitiveness and independence.
'Today, we are stepping in to ensure a successful clean future for the automotive sector.
'We are introducing flexibilities for manufacturers, and in turn this will have to be compensated with low-carbon steel and the use of sustainable fuels to drive down emissions.'
Current EU rules require all new cars and vans from 2035 to have zero emissions.
However, under Tuesday's proposal, the target would shift to a 90 per cent cut in CO2 emissions from 2021 levels, instead of 100 per cent.
Car makers would need to offset the remaining 10 per cent CO2 emissions by using lower-carbon steel made in the EU and synthetic e-fuels or non-food biofuels such as agricultural waste and used cooking oil.
The plan also gives car makers a three-year window from 2030 to 2032 to cut car CO2 emissions by 55 per cent from 2021 levels, while the 2030 target for vans would be eased to 40 per cent from 50 per cent.
The moves, which require approval from EU governments and the European Parliament, mark the bloc's biggest retreat from its green policies enacted over the previous five years.
European car makers including Volkswagen and Fiat owner Stellantis have also flagged soft EV demand and urged looser targets and lower fines for missing them.
Automotive lobby ACEA called the moment 'high noon' for the sector.
Instead of outlawing the sale of new petrol and diesels, those that cut CO2 emission by 90% compared to 2021 levels will be allowed to remain on sale beyond 2035. This will allow for car makers to experiment with the adoption of low CO2 synthetic e-fuels
Synthetic fuel is manufactured using captured carbon dioxide or carbon monoxide, together with hydrogen obtained from sustainable electricity sources such as wind, solar and nuclear power. When the fuel is burned, the aim is for it to release the same amount of carbon dioxide into the air that it has taken out during the manufacturing process, creating a carbon-neutral footprint
Porsche is one of the car brands that has been pushing the development of e-fuels. It has invested over £61million in a production plant in Chile, which is operated by HIF (pictured)
German manufacturers are under particular strain as they lose ground in China to local rivals and face growing competition at home from Chinese EV imports.
Volkswagen, Mercedes-Benz and BMW are among the car giants to have lobbied for the relaxed rules, as have fellow European makers Renault and Stellantis.
EU tariffs on Chinese-built EVs have offered only limited relief.
The EV industry warned that easing emissions targets could undermine investment and leave Europe falling further behind China in the shift to cleaner driving.
'Moving from a clear 100 per cent zero-emissions target to 90 per cent may seem small, but if we backtrack now, we won't just hurt the climate. We'll hurt Europe's ability to compete,' said Michael Lohscheller, CEO of Swedish EV manufacturer Polestar.
William Todts, executive director of green think tank Transport & Environment, said the EU was playing for time while China was racing ahead.
'Clinging to combustion engines won't make European auto makers great again,' he said.
The Commission also outlined plans to boost EV uptake in corporate fleets, which account for about 60 per cent of new car sales in Europe.
National targets for 2030 and 2035 would be set based on GDP per capita, leaving countries to decide how to meet them.
Industry groups have cited Belgium's tax breaks for EV company cars as a model.
The Commission further proposed creating a new regulatory category for small EVs, subject to lighter rules and eligible for extra credits towards CO2 targets if made in the EU.
The UK Government intends to ban the sale of new traditional petrol and diesel cars in 2030, giving hybrids a five-year stay of execution until 2035. But pressure is mounting from Labour's opposition to following in the EU's tyre tracks and scrap the deadline entirely
Department for Transport officials are said to be standing firm and have told UK car manufacturers that Britain's 2030 deadline on the sales of conventional petrol and diesel models will not be adjusted.
Accelerating the ban from 2035 was one of Labour's major manifesto pledges ahead of the previous general election, though having confirmed the renewed 2030 date earlier this year, it then relaxed the targets in April.
This included giving self-charging and plug-in hybrid vehicles - which use both a petrol engine and battery - a five-year stay of execution to remain in showrooms until 2035.
A government spokesman earlier this week told the Daily Mail: 'We remain committed to phasing out all new non-zero emission car and van sales by 2035.
'More drivers than ever are choosing electric, and November saw another month of increased sales with EV's accounting for one in four cars sold.'
However, a snap poll of Daily Mail readers found that nine in ten would support scrapping the 2030 deadline as the Conservatives are ramping up pressure for it to be axed.
This week, Kemi Badenoch confirmed the Tories would cull the 2030 ban on the sale of petrol and diesel cars if they win the next general election, saying Labour's push for EVs was an 'economic act of self-harm'.
She added that China would be 'the only winners' if Britain went electric, as she responded to reports that the EU was preparing to scrap its own deadline.
She said the European Union's 'change of heart' would mean Britain would be putting its domestic industry at 'a disadvantage' by going alone with the proposals.
To reverse the 2030 ban, Mrs Badenoch would also scrap the Zero Emission Vehicle (ZEV) mandate, which she dubbed a 'destructive' system - despite it being introduced by the Conversative Party almost two years ago.
Under the law, car manufacturers must meet rapidly increasing quotas for sales of electric vehicles (EVs), rising from 28 per cent in 2025 to 100 per cent a decade later.
Electric future: The ZEV mandate forces car makers to sell an increasing volume of EVs between now and 2035. Failure to meet the annual targets can result in fines of £12,000 per car under the required quota
Mrs Badenoch said: 'Labour's rush to Net Zero is having a disastrous effect on the UK car industry. The Conservatives will ensure that we protect the environment, but we will do so without forcing families to bear the brunt of the costs, and forcing car makers to meet deadlines that don't reflect consumer demand.
'By scrapping the ZEV mandate and the ban on petrol cars we are putting fairness and common sense back into the system and saving money for taxpayers.'
As well as ditching the 2030 ban, Badenoch also said she would slash subsidies for the electric sector to save the taxpayer £3.8billion over the next decade. This includes almost £2billion being invested in grants for purchasing EVs between now and 2030, along with funding for non-research and development programmes.
Responding to today's announcement to the EU, Greenpeace UK’s policy director Dr Douglas Parr said the UK 'must not join Europe in this act of economic self-sabotage'.
He added: 'Over just a few years, electric vehicles have grown to make up more than a quarter of new car sales globally, including the UK, and the trend is accelerating.
'The Commission’s proposal would generate short-term returns for the car industry, but no long-term future.
'If the UK follows suit, it would be short-sighted in terms of industrial policy and job security for car workers, and negligent in terms of air quality and climate protection.'
He added: 'China’s ability to run circles around the European car industry is the result of long-term strategic planning and investment.
'Their EVs are not only cheaper to run, but in some cases already cheaper to buy than their fossil fuel equivalents, while we continue paying through the nose to breath exhaust fumes and destabilise our climate.
'Britain needs to stop pandering to the slowest adopters, and learn from China’s approach of setting and sticking to legal targets.'
On the same day the EU's plans to scrap the 2035 switch to EVs, production of the new electric Nissan Leaf started at the Sunderland factory in the North East. The future of the plant - and its 6,000-strong workforce - relies on the car being a volume seller
Only last month, Chancellor Rachel Reeves announced a pay-per-mile tax on electric cars from 2028 to cover the Exchequer's loss in traditional fuel duties as the car parc increasingly transitioned to EVs. However, the motor industry lambasted the policy as the 'wrong move at the wrong time' as private electric car demand is waning
The announcement was made on the same day production of the new electric Nissan Leaf began at the Japanese car giant's Sunderland factory in the North East.
With Nissan posting a record net loss of £3.8billion last year and introducing a cost-saving strategy, which includes shuttering seven vehicle plants worldwide, the Sunderland factory was spared to allow it to become the European production hub for the Leaf and another full-electric model.
The plant has received a £450million overhaul to retool for EV production, though the factory's future - and that of its 6,000 workforce - is now reliant on the Leaf selling strongly.
Last month, Chancellor Rachel Reeves announced in her Autumn Budget that electric car owners will be stung with a 3p-a-mile eVED tax from 2028 to cover a loss in traditional fuel duties resulting from the shift to electric vehicles.
The motor industry has widely lambasted the decision, calling it the 'wrong move at the wrong time', with registrations data showing muted demand for EVs from private buyers and a deceleration in battery car sales.