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STRASBOURG, Dec 16 (Reuters) – The European Commission is set to backtrack on the EU’s ban on new combustion-engine cars from 2035 by allowing up \u200bto 10% of non-electric vehicles after intense pressure from Germany, Italy and Europe’s \u200cauto sector.<\/p>\n
The EU executive appears to have yielded to the call from carmakers to be allowed to \u200ckeep selling plug-in hybrids and range extenders with CO2-neutral biofuel or synthetic fuel as they struggle to compete against Tesla<\/a> and Chinese electric vehicles.<\/p>\n The move, which will need approval by EU governments and the European Parliament, would be the EU’s most significant climb-down from its \u2060green policies of the past \u200cfive years.<\/p>\n Carmakers such as Volkswagen and Fiat owner Stellantis have pushed for an easing of targets and fines for missing them. European automotive \u200dlobby group ACEA called it “high noon” for the sector, adding that the Commission should ease intermediate 2030 targets as well.<\/p>\n However, the electric vehicle industry says this will undermine investment and result in \u200bthe EU yielding even more ground to China in the shift to EVs.<\/p>\n “Moving \u200cfrom a clear 100% zero-emissions target to 90% may seem small, but if we backtrack now, we won\u2019t just hurt the climate. We\u2019ll hurt Europe\u2019s ability to compete,” said Polestar CEO Michael Lohscheller.<\/p>\n William Todts, executive director of clean transport advocacy group T&E, said the EU was playing for time while China was racing ahead.<\/p>\n “Clinging to combustion engines \u2060won\u2019t make European automakers great again,” he said.<\/p>\n The Commission \u200bwill also detail plans to boost the share \u200bof EVs in corporate fleets, notably company cars, which account for about 60% of Europe’s new car sales. The precise measure is not clear, \u200dbut there may be \u2060an insistence on some local content. The auto industry wants incentives rather than mandatory targets.<\/p>\n The EU executive is also likely to propose a new regulatory category for \u2060small EVs that would incur lower taxes and earn extra credits towards meeting CO2 targets.<\/p>\n Credits might also \u200cbe earned through more sustainable production, such as vehicles made with low-carbon \u200csteel.<\/p>\n (Reporting by Philip BlenkinsopEditing by David Goodman)<\/p>\n<\/div>\n