The European Union is preparing to soften its planned 2035 ban on new combustion engine cars, marking a major shift in policy after months of pressure from automakers and political leaders. What looked immovable even earlier this year is now being reworked to allow internal combustion engines (ICE) to survive beyond the deadline but only if they run on low-emission, renewable fuels.
Automakers Warned of Costs, Infrastructure Gaps, and Job Losses
For years, Europe’s car manufacturers have argued that the EV-only mandate was racing ahead of reality. Charging networks remain inconsistent across member states. Electric vehicles still command higher purchase prices. And behind the scenes, labor groups warned that a forced pivot to battery-electric production could wipe out hundreds of thousands of jobs tied to traditional engine manufacturing and component supply chains.
Automakers large and small pushed Brussels to rethink the timeline. Until a few months ago, the EU refused to blink. Now, that stance is softening.
Germany’s Intervention Proves Pivotal
The turning point came after German Chancellor Friedrich Merz sent a formal letter to European Commission President Ursula von der Leyen urging a policy rethink. According to Apostolos Tzitzikostas, the EU Commissioner for Sustainable Transport and Tourism, the letter was “very well received in Brussels,” and has played a key role in reshaping the final legislation.
Tzitzikostas confirmed in an interview with the business daily Handelsblatt that combustion engines will continue after 2035 — provided they run on renewable, low-emission fuels such as synthetic fuels or advanced biofuels.
Synthetic and Biofuels Take Center Stage
With full-scale electrification still a work in progress, renewable fuels are emerging as a potential bridge. One example already in use is HVO100, a fuel derived from hydrotreated vegetable oil. BMW has been using it in diesel vehicles at its German plants, claiming up to a 90 percent emissions reduction versus conventional diesel.
Synthetic gasoline, or eFuel, is another contender. Porsche has been producing eFuel at a Chilean pilot facility since late 2022, combining water and carbon dioxide using wind energy. The result, according to the company, is a fuel made in “virtually carbon-neutral” conditions.
Both technologies, however, face an enormous scaling challenge. Production volumes today are tiny, and building a full supply chain by 2035 borders on optimistic.
Key Questions Still Hang Over Plug-In Hybrids
The EU had initially planned to present its final “car package” on December 10, but the announcement has been pushed to later this month. That delay reflects the remaining grey zones: Will plug-in hybrids stay beyond 2035? Will range-extended EVs using small combustion engines be allowed? If they operate on renewable fuels, logic suggests they might. If they use fossil fuels, their future looks shaky.
Existing Cars Remain Unaffected
Whatever the final wording, the new rules apply only to sales of new vehicles. Existing car owners will still be free to fill up with regular petrol or diesel.
The coming months will show whether Europe can balance climate goals with industrial stability or whether this compromise only postpones a bigger reckoning.
