View from Brussels: Killing the combustion engine

Carmakers are increasingly planning for life after the internal combustion engine, but for some governments the clean-up of the transport sector still needs to accelerate. Nine European countries are calling for a phase-out date for fossil-fuelled motors.

Volvo is the latest marque to make a big announcement about its future, recently revealing that it will halt sales of internal combustion engine (ICE) cars by 2030 and after this time go all-in on electric propulsion.

Other auto giants like Volkswagen are also stepping up production of electric vehicles (EVs), while luxury brands like Aston Martin have pledged to start building electricity-fuelled cars in the UK as of 2025.

This gradual shift away from gas-guzzling is partly market-driven and partly down to regulations. EU rules on CO2 output mean that manufacturers face substantial fines if their average fleet emissions do not decrease on a consistent basis.

More is being asked of the industry, though, as nine countries - Austria, Belgium, Denmark, Greece, Ireland, Lithuania, Luxembourg, Malta and the Netherlands - have urged the European Commission to propose an EU-wide phase-out date for new ICE car sales.

Individual phase-out dates already exist - the UK is aiming for 2030 - but some analysts insist that given the interconnected nature of the EU's internal market, only a bloc-wide measure will do.

According to a joint paper published this week, the nine countries want the Commission to up its game in the transport sector, pointing to a disappointing strategy published last year that contained very little in terms of actual ideas and proposals.

Their biggest ask is that the EU’s executive branch comes up with a plan to phase out diesel and petrol and to set a target year. They also want extra incentives put in place for manufacturers and more charging infrastructure to sweeten the deal.

“We need a transparent legal framework at EU level that allows member states to move ahead by taking action at national level to incentivise early phase-out of new petrol and diesel cars and vans,” the paper adds.

Essentially, the nine countries want a final phase-out date put in place that all 27 EU members will have to hit, whilst allowing governments that want to do more, at a quicker pace, to do so.

Denmark, one of the nine signatories, had previously called on the Commission to consider an ICE ban but was quickly told that the idea would likely fall foul of internal market rules, which are designed to prevent discrimination against sales.

The situation has changed since the Danes failed to build support initially for their ban plan, as the Commission has committed to reviewing all of its clean energy and climate rules during the course of this year.

According to a new emissions cutting target for 2030, output must fall by at least 55 per cent by the end of the decade and the EU executive’s officials are rapidly realising that transport will have to be brought to heel for that benchmark to be reached.

A tightening of CO2 regulations is already on the cards, as is a review of emission standards. The new ‘Euro 7’ rules could in fact be where the Commission tries to implement a “ban through the backdoor”, according to industry groups.

German trade association VDMA is jittery that Euro 7 will insist on such stringent standards that manufacturers will be unable to build ICE vehicles at a profit, forcing them either to turn to electric or even to go out of business.

“The proposals for the Euro 7 regulation discussed so far jeopardise value chains far beyond the automotive industry by leading to a de facto ban on cars and trucks powered solely by internal combustion engines. Europe cannot afford that,” VDMA insisted.

Whether the Commission decides to go for a de facto ban or pursue a more politically appealing phase-out remains to be seen. The list of nine countries pushing for the latter is striking in that it lacks the support of a major carmaking nation.

As ever, what France, Germany, Italy and Spain think of the idea will likely make or break it and with elections looming in the Bundesrepublik soon, it is hard to predict which way this one will go.

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