'Historic decision': MEPs vote to end sale of petrol and diesel cars, but challenges remain for EU climate plans

A day of high drama in Brussels ended with a huge boost to efforts to phase out petrol and diesel cars and a row over reforms to the EU’s emissions trading scheme

The scale of the divisions in Brussels over the future direction of the EU’s climate strategy were laid bare yesterday by a fractious series of votes in the European Parliament on key plans of the bloc’s sweeping decarbonisation plans.

The day culminated in a major win for green businesses and environmental campaigners, as MEPs voted narrowly in favor of plans to end the sale of petrol and diesel cars across the bloc by 2035. But the landmark vote came just hours after accompanying proposals to strengthen the EU emissions trading scheme (ETS) and introduce a new carbon border adjustment mechanism (CBAM) were deferred when green and left-leaning MEPs and anti-climate action nationalist parties voted against the proposed package of reforms, albeit for very different reasons.

The vote in support of the European Commission proposals to end the sale of new petrol and diesel cars and vans by 2035 was relatively tight, with 339 MEPs in favour, 249 against and 24 abstentions. Moreover, an amendment proposed by the centre-right European People’s Party that would have exempted 10 per cent of cars and vans from the ban was narrowly rejected.

Pascal Canfin, a French centrist MEP who chairs the European Parliament’s Environment Committee, hailed the vote as “a historic decision that will lead us towards a new era of climate neutrality – it is a major victory.”

His comments were echoed by campaigners, who predicted the new phase out target date would help further accelerate the transition towards electric vehicles (EVs). “The deadline means the last fossil fuel cars will be sold by 2035, giving us a fighting chance of averting runaway climate change,” said Alex Keynes, clean vehicles manager at think tank Transport & Environment. “Phasing out combustion engines is also a historic opportunity to help end our oil dependence and make us safer from despots. And it gives the certainty the car industry needs to ramp up production of electric vehicles, which will drive down prices for drivers.”

A ban on the sale of new petrol and diesel vans by 2035 across the bloc would build upon similar target dates adopted by national governments across Europe, several of which are set for 2030 and even 2025. As such, the move would provide consistency across the world’s largest market and all but guarantee that sales of EVs will continue to surge over the coming years.

However, campaigners and business groups also warned that more needs to be done to accelerate the roll out of EVs and accompanying infrastructure charging in the near term. MEPs yesterday voted to require carmakers to cut their average fleet emissions by just 15 per cent in 2025, compared to 2021, and by 55 per cent by 2030, with proposals for a more ambitious target for 2030 and a further interim target for 2027 rejected.

Transport & Environment said the “weak benchmarks will not spur enough action by carmakers this decade to help member states hit their climate goals”. And while MEPs rejected proposals for a loophole to allow synthetic fuels to count towards the targets, concerns remain the package could yet be diluted when it is finalized by the European Council of member state governments in the coming weeks. Parts of the auto industry are understood to be opposed to some of the more ambitious targets approved by MEPs and with the votes in Parliament proving close, fears remain that some member states with large auto manufacturing industries could yet move to water down the current plans.

“Environment ministers should double down on 2035 and leave no room for diversions into fake green solutions like e-fuels,” said Keynes. “Allowing synthetic fuels in cars would be an expensive and wasteful diversion from the mammoth task of cleaning up transport. Battery electric vehicles are ready today and are a cleaner, cheaper, more efficient way to decarbonise.”

Similar concerns over the potential watering down of key climate policies were at the heart of a major row yesterday, after the rejected a compromise proposal to reduce the cap on emissions through the EU ETS carbon market, after Green and left-leaning MEPs argued the plans were too weak. The defeat for the proposed ETS reforms meant related votes on the creation of a carbon border adjustment mechanism and a ‘social climate fund’ were postponed, as MEPs now seek to thrash out a compromise.

The row was sparked centre-right German MEP Peter Liese, the parliament’s lead negotiator on the legislation, put forward a proposal for emissions covered by the ETS to be cut by 63 per cent by 2030 compared to 2005. The proposed target was more ambitious than the 61 per cent originally put forward by the European Commission, but well short of the 67 per cent agreed by the European Parliament’s Environment Committee.

The package also included a watering down of Commission proposals to reduce the number of carbon credits in the market by 117 million in 2024, instead of opting for a 70 million cut in credits. Green and left-leaning MEPs said that particular amendment crossed a red line for them, as it would dampen carbon prices and slow emission reduction efforts in the near term. As such, when the amendment passed the social democrat grouping of MEPs requested a short break to proceedings and at that point decided to vote down the entire package so as to stop a diluted version of the plans passing.

Accordingly, Liese’s plan was rejected by 340 to 265 votes with 34 abstentions, sparking uproar in the plenary hall.

Liese accused the grouping of Social Democrats and Greens of having “wrecked our compromises”. “The Social Democrats and the Greens have failed to live up to their for climate protection,” he said. “They wanted a 67 per cent reduction … at the very time when we are challenged by the crisis in Russia and the need to become less dependent on Russian gas. I think it is really indecent and I hope that we can correct the mistake.”

Writing on Twitter, he also accused the left-leaning bloc of voting with the far-right to oppose the compromise package. “The ETS proposal would have meant more climate protection in many places,” he said. “However, far-right, Greens & Social Democrats have wrecked our compromises & thus diminished the influence of the Parliament. I hope that we can still correct the mistake now.”

But Green and Social Democrat MEPs hit back at Liese, arguing that he had been happy to rely on votes from nationalist parties when he had been looking to water down the overarching target for the ETS. MEPs who opposed the plans said they had defeated a “fossil alliance” that was working to dilute crucial reforms to the ETS. “It is essential that we get the emissions trading system right,” said Jakop Dalunde, a Swedish Green. “ETS, as the biggest climate policy instrument, only works if we have ambitious targets for significantly lower greenhouse gas emissions.”

Canfin said work would now begin immediately to deliver a new compromise agreement, but he signaled that the talks could take several more weeks. “This deal could be made this afternoon, could be made in two weeks, could be made in July, I don’t know yet,” he said.

As such observers will be concerned that the row could delay moves to finalise the entire beefed up climate package by the summer, as the EU looks to urgently its clean energy development plans and curb its reliance on Russian fossil fuel imports in the wake of the Kremlin’s invasion of Ukraine.

Brussels is clearly edging towards a significant strengthening of its climate policies, as evidenced by the passage of plans that will effectively end the era of internal combustion engine vehicles in little over a decade – a scenario that would have been unthinkable only a few years ago. It is highly likely that within a few months the EU will have confirmed a ban on the sale of new petrol and diesel cars by 2035, a clear roadmap for further increasing record high carbon prices, ambitious plans to accelerate renewables deployment and building retrofit projects , and the introduction of a carbon tariff that would protect the blocs’ competitiveness and provide a major new lever for emerging incentives to introduce their own carbon mechanisms.

But the barbs exchanged in the European Parliament yesterday highlighted how there are still plenty of forces within Brussels that want such ambitious decarbonisation plans watered down.

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