On Tuesday, February 14, the European Parliament approved a ban on new sales of carbon-emitting petrol and diesel cars by 2035 through a vote. The ban comes in an effort to accelerate the shift to electric vehicles and fight climate change.
By 2035, the historic regulations will mandate automakers to achieve a 100% reduction in CO2 emissions from new sold vehicles, making it impossible to sell new fossil fuel-powered cars in the 27-nation bloc.
In addition, the law will set a far higher goal of a 55% reduction in CO2 emissions than the current aim of 37.5% for new automobiles sold from in 2030 compared to 2021 levels.
MEPs approved the agreement negotiated with the Council on revised CO2 emission performance standards for new vehicles and vans in line with the EU’s climate ambition with 340 votes in favor, 279 against, and 21 abstentions.
By 2030, CO2 emissions from automobiles are to be cut by 55% compared to levels in 2021, and those from vans are to be cut by 50%.
Up to the end of 2035, low-volume producers—those who produce between 1000 and 10,000 new cars or between 1000 and 22,000 new vans annually—may be excused from the regulations. After that, those who register less than 1000 brand-new automobiles each year will still be exempt.
The European Commission will introduce a technique by the year 2025 for calculating and reporting the lifetime CO2 emissions of new cars and vans. It will then provide a report every two years to assess the EU’s advancements toward zero-emissions road mobility.
Then, by December 2026, it will monitor the discrepancy between actual fuel and energy consumption data and the legally mandated emissions limitations; and develop a methodology for adjusting manufacturers’ specific CO2 emissions.
According to a statement from the EU Parliament, current incentives for automakers to sell more ZLEV or zero- and low-emission vehicles (0-50g/km of CO2) will be modified in accordance with sales trends. As the usage of battery-electric and plug-in hybrid vehicles rises, these are expected to drop.
It is notable that in October last year, the European Union’s proposal to reach zero-emission road mobility by 2035 was approved by the member states. Now, after the final voting, the legislation will be sent to the Council of the European Union for approval which is likely to happen in March.
Jan Huitema, the chief negotiator for the law in the EU Parliament stated that this legislation promotes the development of low- and zero-emission automobiles. To achieve climate neutrality by 2050, it comprises a zero-emission objective for 2035 as well as an ambitious modification of the 2030 targets. These goals bring clarity to the automotive sector and encourage investment and innovation among automakers.
“Purchasing and driving zero-emission cars will become cheaper for consumers and a second-hand market will emerge more quickly. It opens up sustainable driving to everyone,” Huitema said.
Fit for 55
As part of the “Fit for 55” initiative, the Commission presented a legislative proposal on July 14, 2021, to update the CO2 emission performance standards for new cars and light trucks. The proposal intends to benefit citizens, advance zero-emission technology innovation, and support the EU’s 2030 and 2050 climate goals.
With regard to a variety of policy areas and economic sectors, including climate, energy and fuels, transportation, buildings, land use, and forestry, “Fit for 55” aims to reinforce eight current pieces of law and introduces five new initiatives. The reason for the moniker is that the package is meant to put the Union on track to achieve its 2030 emission reduction target of a 55% decrease from 1990 levels.
According to Fit for 55, a separate Emissions Trading System (ETS) from the EU’s current ETS must be formed for buildings and road transportation, and it should start operating from 2026 onwards. ETS are market-based tools that incentivize the reduction of emissions in areas where these are quite cost-effective.
The EU proposes the establishment of a Social Climate Fund, which will take several forms, ranging from money for building renovations and access to low-carbon transportation to direct income support, to assist low-income residents and small companies in adapting to the new ETS.
EU aims to utilize 25% of the revenue generated from the new ETS to finance the formation of this fund. Between 2023 and 2025, it is suggested that the current ETS be extended to the maritime sector.
Carbon border adjustment mechanism: The EU has proposed a carbon-border adjustment mechanism, which will charge imports from regions with carbon-intensive production processes in addition to other market-based mechanisms.
The phase-out of the free allowance distribution under the EU Emissions Trading System (ETS) to encourage the decarbonization of the EU industry is coordinated with the progressive implementation of the CBAM.
With a three-year transition period, it will go into effect in October 2023 and, in its initial phase, will be applied to five important industries: iron and steel, aluminium, cement, fertilizers, and power.
The proposal from the Commission aims to enhance the sector’s contribution to the EU’s higher overall climate ambition. This sector includes land use, land-use change, and forestry (LULUCF).
EU aims to set an EU-level target for net removals of greenhouse gases of 310 million tonnes of CO2 equivalent by 2030. Additionally, the ReFuelEU Aviation initiative seeks to lessen the environmental impact of the aviation industry.
Recently, Volkswagen announced it to manufacture electric vehicles only from 2033 onwards in Europe. Volkswagen chief executive Thomas Schaefer made this announcement in October last year. Volkswagen, however, does not aim to totally transition to electric drives in other sales regions, such as China or North America anytime soon.
