• The EU has walked back its 2035 ban on new combustion engine cars, allowing limited sales of petrol and diesel vehicles.
• This decision follows pressure from the automotive industry, particularly in Germany and Italy, facing competition from electric vehicle makers.
• The new target for CO2 emissions has been relaxed from 100% to a 90% reduction by 2035.
• Carmakers will be permitted to sell some plug-in hybrids and must compensate for remaining emissions through carbon credits.
• Environmental groups criticize this move, arguing it undermines the EU’s green ambitions and could slow the transition to electric vehicles.

The European Union has reversed its 2035 ban on new petrol and diesel cars, allowing the sale of some combustion engine vehicles as part of a broader strategy to support the struggling automotive sector. This proposal, if approved, will enable automakers to maintain sales of plug-in hybrids and range-extender vehicles, marking a significant shift from the EU's previous plans aimed at achieving carbon neutrality by 2050, according to Le Monde and India Times.

EU industry chief Stéphane Séjourné described the relaxation of car emission targets as a "pragmatic" response to the industry's challenges, stating that the flexibilities introduced are consistent with the EU's climate commitments. He emphasized that while adjusting targets, the core objective of transitioning to electric vehicles remains unchanged, as the bloc faces intense competition from electric vehicle manufacturers across the globe, particularly from China, according to India Times and South China Morning Post.

The decision to allow continued sales of some combustions engine vehicles, coupled with a new target of a 90% reduction in CO2 emissions compared to 2021 levels, has drawn criticism from environmentalists. Critics argue that this rollback represents the EU's most significant retreat from ambitious environmental policies in recent years, potentially undermining investments in electric vehicle technology and infrastructure, according to Le Monde and South China Morning Post.

As part of this plan, the EU will also introduce measures such as "super credits" for small electric vehicles made in Europe, aiming to bolster EV sales which account for a significant portion of new cars. The complied changes show the pressure the EU is facing from major car manufacturers, particularly in Germany, which is seeking to keep a foothold in a rapidly changing market, according to Le Monde and South China Morning Post.