The European Parliament has approved a law that effectively bans the sales of new petrol and diesel cars in Europe from 2035 to accelerate measures to cut 100% of carbon emissions produced by new passenger vehicles and light commercial vehicles or vans.

The EU Parliament approved the new law under the Fit for 55 package and ruled that the intermediate emission reduction targets for 2030 would be 55% for cars and 50% for vans compared with the level recorded in 2021.

The European Parliament members hailed the legislation that aligns with Europe’s climate-centric measures.

By 2025, the European Commission will introduce a methodology to assess the total carbon emissions throughout the entire lifecycle of vehicles sold in the European market.

By December 2026, the Commission will scrutinize the gap between the emission limit values and the real-world fuel and energy consumption data and propose appropriate follow-up measures to control the excess emissions.

Manufacturers producing 1,000-10,000 new cars or 1,000-22,000 new vans may be granted a derogation until the end of 2035, while those registering fewer than a thousand new vehicles annually would be exempted.

Parliament’s lead negotiator Jan Huitema said, “This regulation encourages the production of zero- and low-emission vehicles. These targets create clarity for the car industry and stimulate innovation and investments for car manufacturers. Purchasing and driving zero-emission cars will become cheaper for consumers, and a second-hand market will emerge more quickly. It makes sustainable driving accessible to everyone.”

Every two years, beginning from the end of 2025, the Commission will publish a report to evaluate the progress towards zero-emission road mobility.

The expected sales trends would be met through the current incentive mechanism for zero-and low-emission vehicles (ZLEV) that rewards manufacturers selling more cars with zero to 50g CO2/km emissions, with lower CO2 emission reduction targets.

From 2025 to 2029, the ZLEV benchmark is set at 25% for the sales of new cars and 17% for new vans. The incentive will be removed as of 2030.

Last December, EU member states and parliamentarians agreed on a reform to the emission trading system in Europe to reduce emissions and encourage investments in climate-friendly technologies. The proposed reforms include emission cuts of 62% by 2030 from 2005 levels for the ETS sector, which comprises polluting industries.

In the same month, members of the European Parliament reached a deal to implement the Carbon Border Adjustment Mechanism (CBAM) effective 2023, to incentivize non-EU countries to enhance their climate goals and ensure the region’s efforts are not undermined by production being relocated to countries with less competitive policies.