EU Reaffirms 2035 ICE Phaseout Plan

Support CleanTechnica’s work through a Substack subscription or on Stripe.

Automakers in Europe have been quietly but persistently lobbying their governments to relax the current EU policy that calls for a phaseout of combustion engine–powered cars and light-duty trucks in ten years time. Bloomberg reported recently that the car companies are claiming the ban on combustion engines is no longer realistic and warning that climate rules risk weakening the region’s auto industry and its supplier network.

In a letter to European Commission President Ursula von der Leyen sent in late August, the industry leaders urged the EC to revisit plans to phase out fossil fuel–powered vehicles by the end of 2035, arguing that China’s dominance of the electric vehicle supply chain and new US trade barriers pose fresh hurdles that were not taken into consideration when that policy was put in place.

“Europe’s transformation plan for the auto industry must move beyond idealism to acknowledge current industrial and geopolitical realities,” wrote Ola Källenius, CEO of Mercedes and president of the European Automobile Manufacturers Association, and Matthias Zink, president of the European Association of Automotive Suppliers. “Meeting CO2 targets for 2030 and 2035 is, in today’s world, simply no longer feasible,” the pair said in their letter.

Policymakers in the EU defend the 2035 target, calling it essential to meeting climate goals. Environmental groups argue industry warnings are exaggerated and point to a steady rise in EV sales and a wave of new European battery projects. However, many of those electric cars are manufactured in China, while Chinese battery makers are also setting up shop on the Continent or in nearby nations such as Turkey. The ban on ICE vehicles was narrowly approved in Brussels after years of debate. Countries including France and the Netherlands have already aligned their national policies with that goal.

Politicking At The Munich Auto Show

At the ongoing Munich auto show (IAA), top officials from Volkswagen Group, Mercedes-Benz Group, and Stellantis have spoken out against the ICE ban as they grapple with a stagnant European car market, uneven demand for EVs, and intensifying competition from Chinese manufacturers.

“It is unrealistic to expect to have 100% electric vehicles by 2035,” Volkswagen CEO Oliver Blume told journalists at the show. Bloomberg notes that the Volkswagen display in Munich was dominated by EVs like the up coming ID. Polo. “I am strongly advocating for reality checks,” he added. The question is whether the auto executives are just working the refs here. US manufacturers have been doing that since the 1950s when Henry Ford II grumbled “Safety doesn’t sell.”

The auto industry is especially important to Germany, and so it was no surprise that German Chancellor Friedrich Merz used the occasion of the Munich auto show to support Mercedes and the rest of the German auto industry in their demands for relief from the ICE phaseout plan, calling on Brussels to remain open to several technologies as it tries to reduce transport emissions. “We are, of course, committed to the transition to electric mobility,” Merz said, “but we need more flexibility in regulation.” Källenius told Bloomberg, “Now is the time to do an inventory of what in the policymaking has worked, and what needs to be adjusted. We are very convinced that doing nothing is not an option.”

The European automakers want the European Commission to allow sales of cars that use technologies such as range extender engines beyond the end of 2035. They also want vehicle subsidies kept in place along with more regulatory flexibility for hybrids. That is quite interesting, considering that just two days ago, Transport & Environment released a new report that claims carbon dioxide emissions from plug-in hybrid cars are almost five times higher, on average, than official tests suggest.

That report is based on the latest data published by the EU. The gap between the carbon emissions of PHEVs in the real world and in testing continues despite claims by automakers that the technology has become cleaner. Earlier this month, the European carmaker lobby demanded the EU cancel its efforts to better reflect hybrid emissions when calculating their progress towards climate targets, but it seems unlikely to do so, given the input from T&E.

European Commission Meets

The European Commission met on Friday, September 12, to discuss whether a rollback in its internal combustion phaseout plan would be considered, but according to a report from Der Spiegel, the Commission’s six-page concept paper for that meeting stated the goal of a complete exit from petrol and diesel technology by 2035 is “achievable.”

That viewpoint was bolstered by a report issued just ahead of the meeting by the International Council on Clean Transportation which showed that carmakers are on track to meet the 2027 CO2 targets — an important milestone on the road to the 2035 phaseout. As a counterweight to industry criticism, an open letter was published just a few days ago, in which over 150 managers from the e-mobility sector urged the Commission to hold firm in order to avoid jeopardizing the future of Europe’s car industry.

That sets up a rather interesting conundrum for the commission, since both sides claim there position is the only one that can save the European auto industry. It seems unlikely both positions can be correct.

According to Der Spiegel, the European Commission concedes the industry’s situation is “structurally challenging” and requires “stronger and faster action.” Rolling back the phaseout is not the solution, however. Instead, the Commission proposed a joint political and industrial initiative for European battery cell production, incentives for smaller and more affordable electric cars, and stronger support for European automotive software development.

The Commission also pointed out it has already accommodated the industry by relaxing fleet targets for carbon dioxide for 2025, providing exemptions from road tolls for electric trucks, and requiring a high percentage of electric vehicles in company fleets, which would reduce the fleet emissions of auto companies themselves.

However, the Commission has left one small backdoor open. Exceptions might be introduced for plug-in hybrids and range-extended vehicles — vehicles that combine an electric motor with a combustion engine — but that is far from certain. According to the report, Ursula von der Leyen is not expected to decide on this until spring 2026, when she presents her next planned review report.

EU Climate Policies

The debate is especially pertinent as the EU works out how much further to push its climate ambition. Member nations are divided on a proposal by the Commission to cut emissions 90 percent by 2040, and France is among countries pushing to discuss the issue at leadership level next month. What to do about climate targets for the auto sector is likely to feature heavily in that debate, with Italy pushing for a carveout for biofuels as a condition of its support for the 2040 goal.

Readers often ask what politics has to do with cleantech. The answer is: in a world where right-wing radicals have politicized everything, policies in the US are having an impact on German automakers like Porsche and Audi that rely on sales in the US.

With goofballs like Chris Wright parading around Europe today touting the wonders of fossil fuels, and everyone walking on egg shells to avoid angering the tyrant in the Offal Office — who recently destroyed a carefully crafted political alliance with India because its prime minister would not nominate him for the Nobel Peace Prize — politics is clearly on everyone’s mind these days.

Despite the official position of the failed US administration that a hotter, wetter world is a blessing, rational world leaders need to keep their eyes clearly on the prize of a sustainable environment where everyone — not just the progeny of northern European white males who emigrated to America — can thrive for millennia to come. Is that too much to ask?