German Auto Lobby Proposal Sparks Renewed Debate on EU Combustion Engine Ban

June 07, 2025

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by Jordyn Dahl (Politico) The group wants to allow automakers to continue selling some combustion engines after 2035. -- ... Friday's proposition from the German Association for the Automotive Industry (VDA) came just 10 days after the Council granted automakers leniency on this year's emission targets. That was a response to pleas it would cost the sector billions in fines.

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The VDA now wants to shift from a full ban to a 90 percent CO2 reduction target for new vehicles by 2035. That means 10 percent of vehicles sold could be powered by internal combustion engines.

The proposal caught some German lawmakers off guard.

"The VDA's position surprised us. We will adhere to the fleet emission limits as stipulated in the coalition agreement, and we expect the EU Commission to do the same," said Isabel Cademartori, transport policy spokesperson for the Social Democratic Party, the junior partner in Germany's ruling coalition.

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The Christian Democrats of Chancellor Friedrich Merz have been calling for a rethink of the 2035 rule, and are backed by conservative lawmakers in the European Parliament as well as countries with important car industries like Poland and the Czech Republic.

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Another critical component of the VDA proposal — and also of broader efforts to undercut the 2035 ban — are exceptions allowing e-fuels and biofuels that replace fossil fuels in conventional cars. They argue the fuels have a smaller climate impact than gasoline and diesel, although green groups point out they are very expensive and only available in limited quantities. READ MORE

Related articles

German car giants push new government to lift ban on combustion engine cars (Clean Energy Wire/The Driven)
CO2 fleet limits: VDA paper calls for de facto reversal of combustion engine ban. (Table Briefings)
German car industry calls for reversal of EU 2035 combustion engine ban (Clean Energy Wire)
VDA: Reduce CO₂ emissions in transport, ensure the competitiveness of the automotive industry (Automotive World/German Association of the Automotive Industry (VDA))
Achieving CO2 fleet targets requires flexibilization and massive improvements in framework conditions (German Association of the Automotive Industry (VDA) January 2025)

Excerpt from Clean Energy Wire/The Driven: The changes would mean that “a limited number of new combustion engines can still be registered after 2035,” said the head of the VDA lobby group, Hildegard Müller, to Politico. Additional emissions could be compensated for by “more ambitious targets for renewable fuels,” she added.

Chancellor Friedrich Merz’s conservatives called for a reversal of the ban prior to this year’s federal election in Germany, but the policy did not make it into the coalition agreement his party made with the Social Democrats (SPD).

The ban on the sale of new combustion engine cars from 2035 onwards is EU law and cannot be reversed single-handedly by Germany. However, other member state governments have also said they want to lift the ban. The European Parliament’s centre-right European People’s Party (EPP), to which Merz’s conservatives belong, have also pushed to reverse it.

Many car industry experts have said the battle over the 2035 combustion engine ban is largely symbolic. It appears unlikely that many consumers would opt for a combustion engine car in ten years’ time, given recent technological advancements and price reductions for electric cars. However, they warn it could slow the unavoidable shift to electric cars, by sowing doubts among consumers.

The VDA comprises not only Germany’s carmaking groups VW, Mercedes, and BMW, but also many companies from the country’s large supplier industry, many of which specialise in combustion engine technology, and have few options to survive in a purely electric car market.

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VDA wants to keep the “development and production” of combustion engines in Europe

The VDA’s draft paper calls for softening interim fleet emission targets, as well as allowing the registration of certain long-range plug-in hybrids after 2035. The association justified its call for more technological open-mindedness with the poor e-car sales figures from last year.

The VDA paper states that “in many European countries, there is a lack of charging points, modern electricity grids and purchase incentives like tax incentives,” reported Politico. The association added that demand for e-cars remains “well below what would be necessary to achieve climate targets”.

“The end of the combustion engine cannot be realised in this way; we need to take an honest look at the realities and framework conditions,” the VDA argued. It added that fleet limits should be adjusted so the “development and production of combustion engines – in which we are technological leaders – could be kept in Europe.” READ MORE

Excerpt from Automotive World/German Association of the Automotive Industry (VDA): The German Association of the Automotive Industry (VDA) is presenting a 10-point plan for climate-neutral mobility ahead of the planned continuation of the Strategic Dialogue on the Future of the European Automotive Industry in Brussels. With this plan, the VDA is calling on policymakers in Brussels and Berlin to establish the necessary framework conditions for the long-term and sustainable success of electromobility and to enable the flexibility and technological openness required to achieve climate targets. It is crucial that the reviews of fleet regulations are used to reflect the new realities: the ramp-up of electromobility is lagging behind expectations, supply chains lack resilience, and Europe urgently needs to catch up in international competition.

“The German automotive industry is committed to the Paris climate goals and is resolutely driving the transformation to CO₂-neutral drive systems with innovations and investments. Companies have invested significantly in the transformation – in converting production, creating new capacities, and training their employees. From 2025 to 2029 alone, investments of around €320bn in research and development are planned. In addition, there will be around €220bn in capital expenditures, particularly in factories. The production capacities for a massive ramp-up of electromobility have been created. This year, almost every second car produced in Germany is expected to be an electric car. But these efforts alone are not enough, because the automotive industry’s clear commitment is offset by generally weak demand in Europe, inadequate framework conditions for the success of e-mobility, significant geopolitical changes, a location in need of reform, and a highly challenging competitive environment. In addition, the countervailing tariffs imposed by the EU Commission on electric cars from China also represent enormous additional burdens for European automotive companies. Further burdens and uncertainties also arise from the erratic US customs policy,” VDA President Hildegard Müller explains.

“Brussels must respond to the changing global situation. Achieving the ambitious climate targets must be strategically linked to maintaining competitiveness. It is crucial to politically consider the changed situation and act accordingly, because one thing is clear: Flexibility is crucial for the success of a long-term project – that is, the ability and willingness to successfully adapt to a changing situation. In any case, politicians have culpably neglected their task with the CO₂ fleet regulations for cars and vans, as well as for heavy commercial vehicles – namely, to create the framework conditions, particularly with regard to charging infrastructure and the accompanying network expansion, so that the ambitious targets can actually be achieved. Now the need for improvements and adaptation is all the more urgent,” Müller continued.

10-point plan for climate-neutral mobility

With regard to CO₂ fleet regulations for passenger cars and vans, as well as for heavy commercial vehicles, the European climate targets in transport currently cannot be achieved due to the insufficient and, in some cases, missing political measures to support the transformation. Therefore, the EU Commission must use the review processes of the CO₂ fleet regulations to create the necessary conditions for this and, at the same time, establish flexibility and technological openness as central pillars for maintaining the competitiveness of the automotive industry.

“With the 10-point plan, the VDA is presenting a strategic proposal for the further development of existing regulations that combines climate protection with successful economic development. The goal is to reduce CO₂ emissions in transport while simultaneously strengthening Germany and Europe as industrial locations in a changing world and securing the competitiveness of the automotive industry,” Müller explains. “What we need is a regulatory framework that enables investments in all climate-friendly technologies, ensures industrial resilience, and unleashes innovation.”

1. The automotive industry supports the Paris climate goals. The CO₂ fleet regulations are not backed by sufficient political measures and therefore cannot be met. We are focusing on incentives and favorable location conditions rather than new burdens for industry and consumers. A rapid improvement in the framework conditions will be crucial so that consumers can and want to switch to climate-neutral drive systems as quickly as possible.

2. Demand for electromobility, as the key contributor, has so far fallen short of expectations. Therefore, the reviews of fleet regulations for passenger cars/light-duty vehicles (LDVs) and heavy-duty vehicles (HDVs) should be brought forward to 2025 (for trailers, once the monitoring data analysis is available), and progress should be regularly reviewed politically.

3. For the tightening of the targets in 2030 and 2035, relief should be provided in the form of a two-year phase-in of the limit values. In the fleet regulation for HDVs, the amount of possible fines should also be reduced to a level comparable to that for LDVs.

4. The framework conditions place particular emphasis on the charging and H₂ refueling infrastructure (LDV/HDV), with the necessary increase in the AFIR ambition level, in conjunction with accelerated network expansion. This expansion must be carried out in advance and aligned with the targets of CO₂ legislation and the corresponding vehicle ramp-up.

5. In addition, a robust supply of raw materials and intermediate products is of key importance. The EU Commission must urgently improve the European and external economic framework, analyze potential risks, and, in particular, rapidly expand the network of agreements and partnerships.

6. Strengthening technological openness by giving greater consideration to the role of PHEVs beyond 2035 and suspending the planned adjustment of the utility factor (weighting factor that reflects the share of electric journeys) from 2025 onwards. PHEVs with long electric ranges are to be defined as a new vehicle category. Up to a certain fleet volume, these vehicles would be eligible for registration as ZEVs after 2035, regardless of fueling. Other necessary measures relate to an adjustment of the thresholds of the ZLEV benchmark (LDV and HDV) for 2025-2029 and their reintroduction for 2030-2034, as well as a change to the LDV target calculation formula to eliminate the existing disadvantage for vehicles with higher weight (“negative slope”) in fleet regulations. Explanation: The ‘Zero and Low Emission Vehicles’ benchmark describes how many zero and low-emission vehicles a manufacturer must have in its fleet mix in order to make an additional contribution to meeting the CO₂ fleet emissions of its passenger cars and commercial vehicles.

7. Greater focus on renewable fuels by taking their average CO₂ reduction effect into account in LDV fleet regulations, as emissions from combustion engines are currently considered 100% fossil, regardless of the fuel used. This could also be a possible mechanism for HDVs. Furthermore, in accordance with Recital 11, the EU Commission must immediately develop a technically and marketably feasible framework so that carbon-neutral fuel vehicles are also immediately classified as zero-gram vehicles. The focus must also be placed more strongly on the vehicle fleet in order to achieve climate targets in transport with the help of renewable fuels. At the EU level, in addition to a higher GHG quota in RED III, a post-2030 target trajectory must also be created.

8. In the fleet regulation for LDVs, an adjustment of the reduction target to -90% from 2035 and the necessary framework conditions must be ensured. The remaining CO₂ emissions will be offset through more ambitious targets for the share of renewable fuels in the RED.

9. Electromobility must offer a clear overall cost advantage. Reducing the price of charging electricity through increased competition and technology, as well as through a reduction in taxes and duties, is crucial. This applies equally to renewable fuels such as H₂. Incentive systems without market-distorting price thresholds make a successful contribution to the ramp-up of climate-neutral drive systems. A long-term perspective for CO₂-related tolls plays a crucial role, especially for commercial vehicles.

10. Confidence in electromobility must be fundamentally strengthened. This includes actively promoting the positive impact of electromobility. Industry and policymakers must work together and implement joint concepts. It is also necessary to examine which measures can provide consumers with practical benefits from using zero-emission vehicles on the road. To this end, European experiences must be evaluated and adapted where possible and appropriate.

The 10-point plan for climate-neutral mobility is available for download here in German and English. READ MORE