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Bloomberg article EU to Urge 2035 Goal to End Combustion-Engine Era in Autos
By Ewa Krukowska and Alberto Nardelli
July 9, 2021, 10:00 AM

The European Union is set to propose all new cars sold from 2035 should have zero emissions, as part of an unprecedented plan to align its economy with more ambitious climate targets.

The European Commission, the bloc’s regulatory arm, plans to require emissions from new cars and vans to fall by 65% from 2030 and drop to zero from 2035, according to an EU document seen by Bloomberg News. The tougher pollution standards will be complemented by rules that will oblige national governments to bolster vehicle charging infrastructure.

The clean overhaul of transport will be part of a swath of measures to be unveiled next week to enact a stricter 2030 climate goal of cutting greenhouse gases by at least 55% from 1990 levels. Europe aims to become the world’s first net-zero emissions continent by 2050, which will require overhauling every corner of its economy with transport and industry being the biggest challenges.

“There’s no way around it, reaching net zero by 2050 means phasing out combustion vehicle sales by 2035 at the latest,” said Colin McKerracher, head of advance transport research for BloombergNEF.

The new vehicle emission targets would be a significant tightening compared with the existing fleet-wide emissions goals, which require a 37.5% reduction from 2030 for cars. Passenger cars account for about 12% of total EU CO2 emissions.

The industry has been bracing for tough new measures. Barclays Plc said it will be difficult for carmakers to achieve a 60% emissions reduction target by 2030 even with plug-in hybrids, but the policy will drive further adoption of battery-electric models.

“These targets should not come as a surprise, although they clearly require an accelerated shift,” Kai Alexander Mueller, a Barclays auto analyst, wrote in a report Friday.

Automakers have in recent months announced plans for most or all of their sales in Europe to be battery-electric by the end of the decade. Volkswagen AG, the region’s largest manufacturer, plans for more than 70% of its namesake brand sales to be EV from 2030 onward. Renault SA’s main marque plans to reach 90% penetration by then, while Ford Motor Co. has said its passenger car business will be all-electric.

“Tightening the CO2 targets this much is a huge boost for Europe’s EV market,” said BNEF’s McKerracher. “The steady drumbeat of European automakers upping their EV commitments recently is probably an indication that they knew much tighter targets were coming.”