Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
The EU’s biggest political group is pushing for a reversal of an upcoming ban on combustion engines to stop the “unprecedented pressure” facing Europe’s auto industry.
The conservative European People’s party, in a position paper seen by the Financial Times, said the 2035 ban on the sale of new cars with combustion engines “should be reversed”. Traditional engines should continue to be allowed if they run on biofuels and other low-emission alternatives, it said.
The group that counts among its members European Commission president Ursula von der Leyen also said that fines for carmakers for exceeding new emissions limits, which are due to come in from next year, should be reconsidered.
The multibillion-euro fines were designed to provide an incentive for the production of electric vehicles, but given the slump in EV sales in Europe, this measure was now counterproductive, the EPP argued.
The group is pushing for a planned review of the 2035 law to be brought forward a year to 2025 in order to “correct” the ban and “provide the sector with legal certainty and planning security as soon as possible”.
The position paper could change slightly before it is adopted by the group in December.
Von der Leyen has maintained that Brussels will uphold the ban, which was enacted during her first term as part of a package of laws aimed at cutting carbon emissions in the EU to net zero by 2050.
This week, however, she announced that she would personally chair talks with stakeholders across the industry “to design solutions together as this industry goes through a deep and disruptive transition”.
Manfred Weber, the EPP leader and a German politician, met car chiefs this month amid growing concern about the state of the industry following Volkswagen and Ford announcing tens of thousands of job cuts.
All major EU-based carmakers have issued profit warnings, except for Renault, as they struggle to compete with cheap Chinese electric vehicles at the same time as transitioning their own production lines to EVs amid weakening European demand.
Acea, the car industry body, has called for “urgent relief measures” before the new emissions targets come into force in 2025.
Following European parliament elections in June, Weber has teamed up with groups across the political spectrum, including Italian Prime Minister Giorgia Meloni’s Brothers of Italy, which have questioned the bloc’s climate goals. Meloni has called the 2035 ban a “self-destructive” policy.
German Chancellor Olaf Scholz, a Socialist, has also demanded fines be scrapped.
Industry ministers of seven EU countries led by Italy and the Czech Republic on Thursday echoed the EPP’s paper in calling for an earlier review of the 2035 ban and greater allowances for renewable fuels. They also requested better incentive schemes for consumers to buy electric vehicles.
