EU Reverses 2035 ICE Ban, Aims For 90% Carbon Reduction Instead

The European Union (EU) is reportedly walking back on its initially ambitious goal of banning vehicles with internal combustion engines (ICE) – encompassing both petrol and diesel types – by 2035.

A major revision to said initiative was announced recently by the European Commission (EC). Key to which is a switch from 100% reduction of tailpipe carbon emissions to a more ‘realistic’ 90% figure from 2035 onwards.

As for the remaining 10%, the commission notes this can be offset using a mix of biofuels, synthetic fuels (e-fuels), along with credits tied to the use of low-carbon steel produced within the Old Continent itself.

ICE vehicles, along with MHEVs, PHEVs, as well as REEVs/EREVs, can continue existing alongside EVs and hydrogen FCEVs thanks to this reversal.

Practically speaking, this now allow vehicles with pure ICE, mild-hybrid (MHEV), plug-in hybrid (PHEV), and range-extender/extended-range EVs (REEVs/EREVs) to continue existing alongside electric (EVs) and hydrogen fuel-cell electric vehicles (FCEVs).

Critically, once 90% decarbonisation is achieved, there is no hard legal endpoint for the sale of ICE-powered vehicles. However, this comes on the condition that manufacturers can mete out a balance for their emissions via approved compensation methods.

With these softened requirements aimed for 2030 instead, automakers will benefit as emissions targets will then be averaged over a period between 2030 to 2032. In turn, this grant added flexibility to automakers, mirroring the approach taken prior in 2025.

This reversal and revision follows on from high-level meetings between EU officials and auto industry reps over the course of a year – this being part of the EU’s broader “strategic dialogue” that aims to rebuild trust following years of tension.

Much of the latter stemmed from the fallout of German automaking giant Volkswagen and its diesel-emissions scandal – better known as ‘Dieselgate’.

Despite the reversal, the EU has not abandoned electrification. In fact, the EC will increase issuing incentives for small, affordable EVs made in the EU, granting them with “super credits” that will count heavily towards a manufacturer’s emissions compliance.

The EC also announced a new M1E vehicle classification, which aims to simplily regulations for EVs with lengths no greater than 4,200 mm.

With that, a new M1E vehicle classification was also announced, and it’s poised to simplify regulations for EVs no greater than 4,200 mm in length. In turn, this will make it easier for governments to support them through targeted incentives.

Moreover, in a bid to grant automakers more stability, the EC has proposed a 10-year freeze on new vehicle regulations. This could significantly lower compliance complexities, offering clearer long-term planning for products cycles too.

Besides that, the EC is also poised to roll out heightened support for battery production in the EU zone, increase investment in software-defined vehicles (SDVs), as well as new local-content requirements for EVs.

Altogether, these steps aim to improve competitiveness, especially in the face of increasing pressure exerted by scores of Chinese automakers – many of which are hungry for market expansion across the Old Continent, now more than ever.