Official: EU plan to ban combustion engines binned

After 'intense dialogue', European Commission sees the light...

By PH Staff / Tuesday, 16 December 2025 / Loading comments

Last week we had the heads up, today we get confirmation: the EU has yielded to intense pressure and will officially seek to reverse course on its plan to effectively ban the sale of combustion engines from 2035 onwards. Assuming it’s endorsed by the European parliament, the revision to its earlier law would mean that OEMs no longer have to reduce CO2 emissions by 100 per cent, but rather 90 per cent of their 2021 levels.

Clearly, this is not intended to herald a return to naturally aspirated V10s en masse, but it does purposefully leave the regulatory door ajar for a new generation of plug-in hybrids, mild hybrids and range extenders - all considered a far more palatable (and therefore realistic) route to electrification by European carmakers. The latter were joined in their lobbying efforts by the governments of Germany and Italy, both with considerable interest in securing a stay of execution for combustion engines.

‘From 2035 onwards, carmakers will need to comply with a 90 per cent tailpipe emissions reduction target, while the remaining 10 per cent emissions will need to be compensated through the use of low-carbon steel Made in the Union, or from e-fuels and biofuels,’ notes the official statement. The European Commission has also sought to incentivise ‘small, affordable’ EVs with the introduction of ‘super credits’ for manufacturers alongside a ‘banking & borrowing’ system to meet targets in 2030-32.

The European Commission was due to revise its rule change next year, but mounting criticism of the phase-out reached fever pitch in the face of faltering demand for EVs and disgruntlement over high prices - both made worse by a sharp rise in cheaper Chinese imports. By last Friday, relaxation of the criteria seemed inevitable: “The reality is that there will still be millions of combustion engine-based cars around the world in 2035, 2040 and 2050,” remarked the German Chancellor, Friedrich Merz.

Apparently less concerned with reality, so far at any rate, is the UK government, which has suggested that it would not dilute its own plans to introduce an outright ban on petrol and diesel engines in ten years. Its reticence, predictably enough, was reflected in the shrill opposition of environmental groups, unconvinced of the wider business case highlighted by OEMs and critical of the perceived backward step in the EU’s leadership of the climate change agenda.

When originally enacted, the policy was considered a tentpole feature of the Green Deal - yet its intent was eroded almost immediately, with prospective exemptions for CO2-neutral synthetic fuels introduced at the last minute. Some European countries, France prominent among them, have maintained support for the proposed end to combustion, pointing to a 26 per cent increase in the sale of EVs in 2025. But the pace of change, mostly driven by cheaper-to-buy models, has not kept pace with expectations and no longer seems aligned with the global market.

In the same week as the EU’s announcement, Ford confirmed that it will cancel plans to build a number of large, high-profile EVs - not least the battery-powered version of its best-selling F-150 pickup. The problem? “Lower-than-expected demand, high costs and regulatory changes,” according to its chief executive. The change in strategy is expected to cost Ford as much as £14.6bn.

Even OEMs committed to long-term change have become reflective on the issue. ‘‘The future is electric," noted VW chief exec, Thomas Schäfer. ‘‘On the way there, you need a bit more flexibility to make sure that you can deliver what customers actually want.” The EU, it seems, has come sharply around to that way of thinking...