In a decision that is set to present a number of challenges to the German car industry, the 27 EU member states have approved the European Commission's proposal to introduce a ban on the sale of new diesel and petrol cars in the EU from 2035.

EU member states approve package of climate policies

The European climate package includes five draft policies, all of which were proposed by the European Commission last summer. Now that the 27 EU member states have reached an agreement regarding the five proposed laws, the negotiations regarding the final laws can begin in the European Parliament.

Many aspects of the EU’s new policies are aimed at reducing greenhouse gas emissions across the continent by 55 percent compared to 1990, a more ambitious target than the 40 percent originally proposed. The EU’s long-term goal is to be climate neutral by 2050, allowing the bloc to encourage other major polluters, such as the United States and China, to follow its lead.

The policies approved by the member states include the decision to reduce the availability of CO2 permits for factories and power plants and form a 59-billion-euro fund to protect citizens from rising costs as a result of new environmental legislation.

Combustion engine ban a challenge for German car industry

One key aspect of the new European climate package is introduction of a 100 percent CO2 reduction target for new vehicles by 2035. Effectively, this means that, from 2035, a ban on the production and sale of new diesel and petrol cars will be in effect in the EU. European lawmakers hope this will play a significant role in reducing emissions, as transport currently accounts for around 25 percent of all greenhouse gas emissions in the EU.

While German government ministers have reacted positively to the decision, which is in line with its own aim to become carbon-neutral by 2045, the ban poses a serious challenge for the German automotive industry. The coalition parties backed the ban - but only if the sale of cars powered by “CO2 neutral” fuels such as hydrogen would still be permitted after the cut-off date. 

"EU member states have voted with an overwhelming majority that, starting from 2035, only cars and light commercial vehicles will be permitted that do not emit CO2," said Environment Minister Steffi Lemke. "This sends a clear signal that we must achieve [our] climate targets. It also gives the auto industry the planning security that it needs.”