The European Parliament has accepted the "zero emissions" policy proposed by Brussels. According to this decision, from 2035 onwards, only new vehicles (cars and vans) with zero CO2 emissions will be allowed for sale in Europe. But can we trust this?
The clock may be ticking for the internal combustion engine... Or maybe not... The European Parliament has agreed to a law to make cars and vans in Europe zero-emission by 2035. However, the 27 deputies have pledged to discuss the issue again in 2026. Several governments are opposed to the idea. Not everything is settled yet.
Let's look at what this decision means for the car industry.
What is in the law?
From 2035, CO2 emissions from new cars and vans sold in Europe will have to be reduced by 100% compared to 2021. Emissions from production are not accounted for. Second-hand cars are not affected. The members of the European Parliament have accepted the regulation text. Tough negotiations with the member states are now underway. Germany, for example, has already announced that it does not want to ratify the document.
De facto and according to current technological knowledge, this law implies the end of the combustion engine and the rise of electric mobility. Hybrids are also impacted. As things stand, they will be banned from sale. However, the law does not explicitly prohibit or favour any particular technology, the sole aim being to achieve "zero emissions". The left wing and environmental groups welcome the bill, whereas the right parties are concerned about the future of the car industry.
What does it mean for the car market?
Finance
This decision puts manufacturers in a difficult situation. Indeed, it only affects the European market. Although it is not excluded that other governments will follow the same strategy, there is no guarantee. But, for the moment, manufacturers have to invest heavily in several technologies to improve the combustion engine on the one hand and to ensure that they have competitive electric products on the other. That could have an impact on prices.
Some manufacturers, like Porsche, have invested heavily in synthetic fuels. As it stands, the law does not allow the use of this type of gas. Thus, these investments would prove unnecessary, at least for the European market. Moreover, the uncertainty until the 2026 discussions on the application of the law in question puts a serious brake on progress.
Product diversity
As a result of this news, producers whose brand image does not match with electric cars may decide to exit the European market, whereas others may prefer to focus on it. However, this decision also opens the doors to new players.
Infrastructures
Road infrastructure needs to be adapted. Service stations will have to be partially redesigned. However, the timeframe for this change is somewhat longer. Internal combustion cars are not expected to disappear from the roads before 2050. The number of charging stations will, however, have to increase rapidly.
The end of the grants
This law also means the end of monetary and non-monetary benefits for electric vehicles and probably the beginning of a more restrictive policy for internal combustion engines. As the number of electric vehicles benefiting from incentives increases, government revenues will come under pressure. This trend can already be observed.
What about Switzerland?
Switzerland is not part of the European Union. Yet, due to its geographical and political position, it is in the same situation as the member states.
Is it really the end?
Hybrids
Several governments and industry groups are opposed to this decision. After initial negotiations, exceptions may be granted to plug-in hybrids. Discussions on this issue will happen in 2026. The outcome will depend on technological advances.
Synthetic fuels
Synthetic fuels could be exempted. In such a case, the combustion engine would not disappear. The topic will be addressed in 2026 too.
Other exceptions
Currently, companies producing less than 10,000 vehicles per year are not subject to the same rules as large-scale producers. Typically, VW faces stricter ecological restrictions than Ferrari. That is why the Italian brand, among others, can still afford to sell naturally-aspirated V12 engines at a time when downsizing is the new rule. These derogations have already been extended by six years and will end in 2036.
Uncertainty
That is not the first time a government announces a project to reduce greenhouse gas emissions and eventually backs up. That is currently the case with the reopening of nuclear power plants to tackle the electricity shortage. Although there are still more than ten years to go before this law comes into force, many tasks need to be completed before this transition happens. In addition, other technological improvements could come along and make the electric car obsolete. Finally, one should not underestimate the influence of lobbies.
Employment
One should not forget that the car industry is the most important in terms of employment in Europe. If bankruptcies or large-scale layoffs were to occur, a revision of the law could not be excluded.
Conclusion
This new law is a big step toward the 2050 carbon neutrality targets. In reality, many questions are still open, and several member states have expressed their reluctance. Moreover, the potential exemptions mentioned above show that it is only the first draft of the project.
In short, it is a media buzz whose application is not clear yet. It will therefore be a few years before we know the final strategy the European Parliament will follow. Many changes could still occur...
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