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EU member states approve zero emissions vehicle law

Line of brand new cars

EU member states have approved plans requiring all cars and vans registered by manufacturers in the bloc to be ‘zero emissions’ from 2035.

The law as originally drafted would have banned all internal combustion engines in vehicles from this date but was amended following an objection by Germany. The final proposal will allow the use of engines that run on synthetic ‘e-fuels’, which are produced using green electricity and are climate neutral.

The new regulation (56-page / 516KB PDF), which will enter into force shortly after publication in the EU Official Journal, sets a provisional target of 55% CO2 emissions reductions for new cars and 50% for new vans between 2030 and 2034, when compared to 2021 levels. From 2025, the target will increase to 100% for both new cars and vans. Manufacturers will be fined €95 per gramme of CO2/km above the target per calendar year.

The European Commission will now work to introduce a new vehicle category for e-fuel cars by autumn 2024. In 2026, it will be required to “thoroughly assess” progress towards the 2035 target, taking into account technological developments and the need for a “viable and socially equitable” transition.

The legislation forms part of the EU’s ‘Fit for 55’ climate protection package, aimed at reducing net greenhouse gas emissions by at least 55% by 2030.

Climate change expert Dragana Dujak of Pinsent Masons welcomed the Commission reaching agreement with Germany on its proposals.

"The burning question is not if, but how we address emissions reduction efficiently,” she said. “Not only the automotive sector, but many companies and industries need to prepare for regulatory challenges and hurdles related to ‘ESG’- issues. To do so, industries and companies need to adapt to the new realities, therefore we always work closely with our clients to prepare them for the next steps and guide them through the thicket of these regulations.”

The regulation was in its final stages when Germany withdrew its support for a full ban. A number of EU member states, including Italy, Poland and Bulgaria, then followed suit – while the Czech Republic expressed reservations.

Ultimately, Poland voted against the revised proposal, while Italy, Bulgaria and Romania abstained, the BBC reported.

Dujak said that the automotive industry would be relieved that it could now work towards implementing the new standards.

“Industry needs plenty of lead time to successfully implement the sweeping reforms included in the legislation,” she said. “To that end, it is essential that the EU establishes reliable regulatory frameworks as quickly as possible.”

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