German auto lobby proposal sparks renewed debate on EU combustion engine ban

Climate groups, and even some automakers, denounced the German car lobby’s newest proposal aimed at weakening the EU’s 2035 ban on the sale of new CO2-emitting cars.

Friday’s proposition from the German Association for the Automotive Industry (VDA) came just 10 days after the Council granted automakers leniency on this year’s emission targets. That was a response to pleas it would cost the sector billions in fines.

Green groups said that shows the danger of giving any leeway on the vehicle emission rules adopted in 2023 following fraught negotiations.

“Give them a finger and they’ll take the whole hand,” Julia Poliscanova, senior director for vehicles with green NGO Transport & Environment (T&E), said in a statement.

The 2035 measure is a key part of the EU’s Green Deal aimed at making the bloc climate neutral by mid-century, but has come under growing political fire.

The VDA now wants to shift from a full ban to a 90 percent CO2 reduction target for new vehicles by 2035. That means 10 percent of vehicles sold could be powered by internal combustion engines.

The proposal caught some German lawmakers off guard.

“The VDA’s position surprised us. We will adhere to the fleet emission limits as stipulated in the coalition agreement, and we expect the EU Commission to do the same,” said Isabel Cademartori, transport policy spokesperson for the Social Democratic Party, the junior partner in Germany’s ruling coalition.

The Christian Democrats of Chancellor Friedrich Merz have been calling for a rethink of the 2035 rule, and are backed by conservative lawmakers in the European Parliament as well as countries with important car industries like Poland and the Czech Republic.

If the European Commission bows to the VDA demand, emissions would increase by up to 31 percent from the current target, according to a T&E analysis.

Another critical component of the VDA proposal — and also of broader efforts to undercut the 2035 ban — are exceptions allowing e-fuels and biofuels that replace fossil fuels in conventional cars. They argue the fuels have a smaller climate impact than gasoline and diesel, although green groups point out they are very expensive and only available in limited quantities.

“The reference to e-fuels and agricultural fuels is a fake solution that will be particularly expensive for consumers. Citizens are once again being cheated with questionable tricks,” said Michael Bloss, spokesperson for the Greens in the European Parliament.

The VDA and some automakers also argue that combustion engineering is the continent’s competitive edge over Chinese carmakers, which are ahead in electric vehicle technology.

But that contention splits the industry.

German automaker Mercedes-Benz threw its support behind the VDA’s 10-point plan, saying “flexibility is a key aspect for the success of the transformation.”

But not all automakers are in favor of a change. Volvo didn’t support the Commission granting automakers a reprieve on fines based on this year’s emission limits. It wants the 2035 legislation to remain the same — a position the brand reiterated following the VDA announcement.

“Policy makers and stakeholders should focus their energy on people (jobs and skills), infrastructure and the value chain rather than on revising the legislation in place,” said a Volvo spokesperson.

Although the VDA says the bloc is falling short on its EV transition goals, which is why the bloc should be more flexible, electric car sales are actually rising fast after a lackluster 2024.

Overall EV sales have increased 26 percent this year in Europe, including a 43 percent year-on-year jump in Germany.

Laura Hülsemann and Jürgen Klöckner contributed reporting from Berlin.