Europe’s grand experiment in banning the combustion engine is quietly being rewritten. Instead of a hard stop on new petrol and diesel cars, political leaders are pivoting toward a looser framework that keeps internal combustion alive alongside electric vehicles and alternative fuels.
The shift reflects a deeper recalibration of the European Union’s climate strategy, as governments weigh industrial competitiveness, voter backlash and technological uncertainty against the bloc’s pledge to reach climate neutrality.
From bold ban to cautious rethink
When EU members agreed that all new light vehicles sold from 2035 would have to be fully zero emission, the move was framed as a clean break with the internal combustion engine. The rule was designed as a technology neutral mandate, meaning any drivetrain could qualify as long as tailpipe emissions were zero, but in practice it was widely read as a de facto electric vehicle requirement, with battery cars and fuel cell models expected to dominate under the 2035 zero emission mandate.
That clarity is now gone. Instead of marching toward a fixed end date, policymakers are reopening the rules, debating carve-outs for combustion engines that run on synthetic fuels and exploring ways to count low carbon liquid energy toward climate goals. The result is a more flexible path that keeps the 2035 objective on paper while softening its impact on the car market.
Political pressure from the European People’s party
The most visible pushback has come from the center right. Meanwhile, European People leaders have argued that a total ban on selling new cars with combustion engines is not necessary to protect the bloc’s car industry, and they have urged Brussels to scrap the outright prohibition in favor of a more gradual transition.
That stance has turned what was once a settled file into a live political fight. By framing the ban as a threat to jobs and competitiveness rather than a climate safeguard, the European People’s party has given cover to national governments that want to slow the pace of change without openly disowning the EU’s environmental ambitions.
Berlin’s U-turn and the Merz factor
Germany’s shift has been especially consequential. The current German chancellor, Friedrich Merz, has publicly called on the European Union to abandon the 2035 combustion engine ban, arguing that the bloc should instead pursue a more flexible path to climate neutrality that leaves room for advanced engines and low carbon fuels. In that debate, German Chancellor Urges EU supporters have echoed carmakers who warn that an abrupt phaseout would undermine one of Europe’s flagship industries.
Berlin’s new line matters because Germany is home to some of the world’s largest manufacturers of internal combustion engines and premium vehicles, from Volkswagen’s Golf and Tiguan to BMW’s 3 Series and Mercedes-Benz’s C-Class. When a German chancellor like Friedrich Merz presses to Scrap the Combustion Engine Ban German Chancellor Friedrich Merz is not just speaking for domestic voters, he is signaling that the EU’s industrial core is no longer comfortable with a one way bet on battery electric cars.
Regulatory backpedaling in Brussels
The political mood is now filtering into the technical rulebook. Against this backdrop, the European Commission has suspended the adoption of secondary legislation that would have defined how combustion engines could comply with future emissions limits under the forthcoming Euro VII Implementing Regulations, and it has launched a call for evidence on revising combustion engine and vehicle emissions rules. That pause, described in detail where Against the earlier timetable, effectively delays the tightening of standards that would have made new combustion models far harder to justify.
At the same time, officials are revisiting how to treat synthetic fuels and other low carbon liquids in the regulatory framework. The Commission has already worked on an e-fuel exemption for Germany to get the combustion car ban finalized, a compromise that allowed engines running exclusively on climate neutral synthetic fuels to survive beyond 2035, and the saga of that exemption shows how many details remain in limbo, as highlighted when the Commission tried to accommodate Germany without unraveling the broader rule.
The Green Deal’s transport vision collides with reality
On paper, the EU’s transport strategy still points firmly toward climate neutrality. Following the Green Deal, the EU is leading the way in transforming its transport sector toward climate neutrality, with a particular focus on sustainable fuels and biomass covered by Annex IX for aviation, shipping and heavy duty road transport, as described in the analysis of Following the Green Deal.
Yet the same strategy assumed that light duty vehicles would move rapidly to zero emission technologies, freeing up limited sustainable biomass and renewable electricity for sectors that are harder to electrify. The political retreat from a hard combustion phaseout complicates that calculus, since every extra petrol or diesel car sold after 2035 will either lock in emissions or require more aggressive cuts elsewhere in the economy.
Fit for 55, Climate Law and the legal straightjacket
Legally, the EU has not watered down its climate destination. The Package that underpins the Fit for 55 policy comes after the EU institutions agreed on the Climate Law, which sets into legislation the objective of climate neutrality by 2050 and a 55% reduction in emissions by 2030 compared with 1990 levels, as laid out in The Package.
Those targets are reinforced by the EU’s long term strategy, which describes the bloc as Striving to become the world’s first climate neutral continent by 2050 and confirms that The EU aims to be climate neutral by 2050, with that goal now anchored in the European Climate Law, as detailed in the Commission’s Striving roadmap. In other words, the destination is fixed, even as the route through the car sector is being redrawn.
Automotive industry fears and the ICE phaseout debate
Automakers have spent years warning that a rigid ban on combustion engines could backfire. In the automotive industry the focus of this pressure is the revision of the 2023 Regulation setting the requirement for a phase out of the internal combustion engine (ICE), and industry voices have argued that mismanaging that Regulation would be one of the mistakes the EU cannot afford, as examined in the analysis titled In the.
From their perspective, the risk is not only stranded factories and lost jobs but also a loss of technological diversity. If Europe bets everything on batteries while other regions keep improving combustion engines and hybrid systems, the continent could find itself dependent on imported technologies and raw materials, a concern that has grown as supply chains for lithium, nickel and rare earths come under geopolitical strain.
Hydrogen, e-fuels and the search for a middle path
Part of the political compromise now emerging is to keep combustion engines on the road, but to decarbonize what goes into the tank. Although the delegated regulation has yet to be adopted, the Commission committed to conclude this process within the framework for renewable hydrogen, which is seen as a cornerstone for full carbon neutrality in the energy sector and a potential feedstock for synthetic fuels, as explained in the discussion of Although the regulatory framework.
In practice, that means policymakers are exploring how to certify hydrogen based e-fuels as climate neutral, how to integrate them into vehicle standards and how to avoid double counting emissions reductions. The e-fuel exemption negotiated for Germany is a preview of that approach, but scaling it up across the single market will require clear rules on lifecycle emissions, sustainability criteria and the limited availability of renewable electricity.
Carbon pricing, CBAM and the wider climate toolbox
The combustion engine debate is also shaped by Europe’s broader climate policy architecture. But full information is impossible; moreover, circumstances constantly change, and the two approaches to carbon pricing in the EU emissions trading system and the Carbon Border Adjustment Mechanism react differently as they do, especially when a reduction in emissions in the CBAM country reduces the demand for emissions allowances, as analyzed in the working paper on how to price But CBAM permits.
That complexity matters because a softer phaseout of combustion engines will leave more emissions in the transport sector that must be absorbed by the EU’s carbon markets or offset by deeper cuts elsewhere. The more the bloc leans on flexible mechanisms like CBAM and emissions trading, the more it can afford to be lenient on specific technologies, but that trade off is politically fraught and technically difficult to calibrate.
More from MorningOverview