EU Backtracks on 2035 Combustion Engine Ban: A Win for German Automakers, But at What Cost?
December 17, 2025 – The European Union has proposed significant revisions to its 2035 ban on new diesel and petrol car sales, responding to intense pressure from Germany and its struggling automotive industry. While automakers cautiously applaud the move, industry groups and environmental advocates are voicing strong concerns, painting a complex picture of the future of mobility in Europe. This article provides a comprehensive analysis of the proposed changes, the reactions, and the potential implications.
The Shift: From 100% to 90% Emission Reduction
for years, the EU aimed for a complete phase-out of new combustion engine vehicles by 2035. However, the new proposals represent a significant softening of this stance.
Instead of a 100% reduction in emissions from 2021 levels, the EU now proposes a 90% reduction. The remaining 10% will be ”compensated” through various, yet-to-be-defined mechanisms. This shift acknowledges the slower-than-anticipated adoption of electric vehicles (EVs) and the growing competitiveness of Chinese EV manufacturers.
Germany Leads the Charge for Flexibility
German Chancellor Friedrich Merz has been a vocal advocate for easing the ban. He argues that the German auto sector, a cornerstone of the national economy, needs more time to adapt to the EV transition.
“More openness to technology and greater flexibility are the right steps,” Merz stated, signaling his government’s support for the revised proposals. The German government will now conduct a detailed review of the EU Commission’s plans.
Automaker Reactions: Cautious Optimism
The response from major German automakers has been cautiously positive.
* Volkswagen: Welcomed the proposals as “pragmatic” and “economically sound,” emphasizing the importance of maintaining options for combustion engine vehicles alongside EVs. this comes as VW navigates job cuts amid slowing EV demand and fierce competition in China.
* BMW: Considered the move an “vital step,” acknowledging the continued viability of combustion engines in the future automotive landscape.
These automakers see the flexibility as crucial for navigating a challenging transition period.
Industry Group Condemnation: A “Disastrous” Package
Despite the automakers’ measured approval, the German association of the Automotive industry (VDA) delivered a scathing critique. VDA President Hildegard Mueller labeled the package “disastrous,” arguing it’s riddled with obstacles that render it ineffective.
Key criticisms from the VDA include:
* New Regulatory Burdens: The proposals introduce “new requirements” related to green steel and renewable fuels,adding further strain to an already struggling sector.
* Lack of Practicality: The VDA contends the compensation mechanisms for the remaining 10% emissions are overly complex and unlikely to deliver meaningful results.
* Competitive Disadvantage: The group fears the regulations will hinder European automakers in the face of increasing global competition.
Environmental Concerns: A Step Backwards in Climate Action
Environmental groups have expressed dismay over the EU’s decision to weaken its climate goals.
Environmental Action Germany condemned the proposals as “a capitulation to German combustion-engine companies that are ignorant of climate issues.” They argue the revised plan undermines the progress made with the original 2023 agreement.
Key Takeaways & future Outlook
The EU’s revised proposals represent a significant compromise. they acknowledge the economic realities facing the German auto industry while attempting to balance climate objectives. Though, the path forward remains uncertain.
* Parliamentary Approval: The proposals still require approval from the EU Parliament and member states, where further debate and potential amendments are likely.
* Compensation Mechanisms: The details of how the remaining 10% emissions will be “compensated” are crucial and will significantly impact the effectiveness of the plan.
* Technological Innovation: The success of this approach hinges on continued innovation in alternative fuels and emission reduction technologies.
This evolving situation highlights the complex interplay between economic pressures, political considerations, and environmental goals in shaping the future of the automotive industry. Continued monitoring of the legislative process and technological developments will be essential to understanding the long-term implications of these changes.
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