Signal for COP27
The European Parliament and government negotiators reached a provisional agreement on a European law aimed at banning the sale of new combustion engine vehicles by 2035. Diesel, petrol, and hybrid cars would be phased out, making zero-emission vehicles the only option from that year forward. Europeans view this milestone as a rapid step in the push toward cleaner mobility. The vice president of the European Commission, Frans Timmermans, acknowledged the pace of progress and called for sustained momentum, noting that the European auto industry is ready and consumers are increasingly receptive to zero-emission mobility.
The text of the legislation establishes stricter emission reduction targets: a 55% cut in CO2 for new cars and a 50% cut for new pickups by 2030, relative to 2021 levels. After five years, the target would reach 100%. Supporters say these benchmarks provide clarity for automakers and spur investment in zero-emission technology, while making vehicles cheaper to operate for consumers. A negotiator from the European Parliament, Jan Huitema, highlighted the potential of the plan to stimulate innovation while guiding the market toward cleaner options.
Leaders stressed that the move aligns with climate neutrality goals and a broader green transition. Zero-emission mobility is presented as a central component in reducing climate risks that could affect the environment, migration, food security, and economic stability. The plan is part of the broader Fit for 55 package, introduced by Brussels in July 2021 to reduce greenhouse gas emissions by 55% by 2030 and to reach climate neutrality by 2050. This framework sets long-term expectations for the automotive sector while keeping the door open for technological evolution.
Gauging the COP27 Context
The agreement was finalized just ten days before COP27 began and reinforces the regulatory incentive for Zero and Low Emission Vehicles (ZLEV) that has operated in many markets. Under this mechanism, manufacturers can receive incentives if they meet certain emission-related parameters while selling zero or low-emission models. The deal also raises the benchmark for cars to 25% and for pickups to 17% by 2030, aligning with current sales patterns and ensuring a reasonable supply of affordable zero-emission options on the market.
Small-volume producers can benefit from temporary exemptions through 2035: car producers with between 1,000 and 10,000 registrations per year, or pickup producers with between 1,000 and 22,000 registrations, can hold exemptions. Manufacturers with fewer than 1,000 annual registrations remain exempt. The pact also guarantees a 2026 review clause that will assess progress toward the 100% reduction target and consider technological developments, including plug-in hybrids, when evaluating future milestones. The Commission is expected to examine progress and adjust if necessary.
Evaluation and Reporting
Brussels will require biannual progress assessments that examine consumer and employment effects, energy efficiency improvements, affordability of low and zero-emission vehicles, and the used-car market. During negotiations, the European Parliament pushed for a standardized methodology to evaluate full lifecycle CO2 emissions for cars and vans sold in the EU. The Commission plans to present this methodology before 2025 along with proposals where appropriate. In addition, Brussels will propose a system to register vehicles that run exclusively on CO2-neutral fuels after 2035.
While the deal drew praise from Timmermans and other negotiators, it also drew criticism from some groups. Critics warned of a “Havana effect,” arguing that outright bans may leave streets with older, unaffordable vehicles once new models become scarce. They contended that the path would benefit certain technologies while missing opportunities to use flexible, market-based regulation. The debate highlights the challenge of balancing aggressive climate action with practical market dynamics while maintaining consumer choice and affordability.