Editor's choice
15 Jul 21

EU ban on ICEs by 2035 "not viable"

European Commission president Ursula von der Leyen (pictured) yesterday presented ‘Fit for 55’, a mega-package of climate measures that will have a huge impact on all corners of the European economy, including mobility. One standout measure: an EU-wide ban on ICE vehicles from 2035.

The plan’s title refers to the aim of reducing the EU’s greenhouse gas emissions by 55% by 2030. In line with the EU's Green Deal, the longer-term goal is for the EU to reach climate neutrality by 2050, and to help keep the global temperature increase below 1.5°C. 

Comprehensive architecture

“Europe is now the first continent with a comprehensive architecture to meet our climate ambitions,” said Ms von der Leyen. “Our package aims to combine the reduction of emissions with measures to preserve nature and to put jobs and social balance at the heart of this transformation.”

The plan’s proposals include:

  • strengthening the EU’s current emissions trading system (ETS), and to expand it from industrial and energy production activities to include shipping. 
  • introducing a new ETS for the transport and building industries. 
  • setting 2035 as the end date for the sale of new cars with internal combustion engines (ICEs). 
  • introducing a climate levy on the import of steel, cement and aluminium.

New Industrial Revolution

These proposals will now be debated between member states and with the European Parliament and may be adapted in the process. However, given the scale of the climate challenge, the massive size of the plan, and of its eventual impact on the European economy, is unlikely to change much. The German environment ministry called the package “nothing less than a new Industrial Revolution in the European Union”.

Various EU member states have already introduced their own ICE bans, suggesting there should be strong public support for 'Fit for 55' in at least those countries. These include France, where an ICE ban will be in place from 2040, the UK, with a ban from 2030 (2035 for hybrids), the Netherlands, Spain and many more. In a dedicated Fleet Europe E-Book, you can find out about all incentives for electric vehicles in Europe. 

‘Fit for 55’ will provide the framework and set the tone for climate change discussions in the EU for the foreseeable future. First reactions are already conforming to expectations. 

“Second Detroit”

While some praise it as a long-overdue step in the right direction, the package doesn’t go far enough for many environmental organisations. On the other hand, Hubert Aiwanger, Economy minister of Bavaria, the main location of BMW and Audi, has warned that too strict climate policies could create a “second Detroit” in his state – a reference to the decimation of the U.S. automotive industry in its home city. 

For its part, ACEA, the association of European carmakers, said it would be ‘studying’ the Commission’s proposals – but already made the following clear:

  • ACEA supports the target of climate neutrality by 2050, and its members are investing billions to get there.
  • However, banning a single technology (i.e. ICE) is not the way forward right now, especially with Europe still struggling to get the transition to EVs right.  

Historic chance

“This proposal for an even bigger cut in CO2 emissions by 2030 requires a massive further increase in market demand for EVs in a short timeframe,” said Oliver Zipse, ACEA president (and CEO of BMW). “Without significantly increased efforts by all stakeholders, the proposed target is simply not viable.”

However, ACEA did welcome some aspects of the proposals, including:

  • Binding targets for the deployment of charging and refuelling infrastructure – although ACEA points out that the reference to 3.5 million charging points by 2030 is well below the Commission’s own earlier calculations, requiring 6 million. 
  • The extension of ETS to road transport fuels, as it will help put a visible price on carbon, thus incentivising low- and zero-carbon fuels. 

Much will need to be fine-tuned in the political discussions with the European Parliament and the 27 EU member states. “Policymakers have a historic chance to get this right,” says Eric-Mark Huitema, ACEA’s Director-General. 

Used cars

A 2035 ban on diesel and petrol cars doesn't mean those cars will simply disappear and many will still be on the roads. However, it is essential to encourage people to switch to EVs in the years to come by increasing the number of (fast) charging stations and by introducing incentives for buying EVs, also on the second-hand market. With cars in many member states reaching an average age of 10 years or more, there is enough time to act, and there is a likelihood that the supply of ICE used cars will drop faster than demand. Leasing companies, large fleets and carmakers may need to accelerate their efforts in the field of cross-border remarketing.

Your views on 'Fit for 55'

The proposed measures will be less disruptive for the fleet and lease industry. As usual, corporate fleets are acting as the pioneers in changing Europe’s mobility landscape. 

As readers of Fleet Europe can read almost every day, lease companies and large corporate fleets one after another are announcing a significant – if not total – electrification of their vehicle portfolios. If there are issues in this process, they are more likely to be on the supply side than on the demand side. However, corporates may be affected by other aspects of Fit for 55, including measures to limit greenhouse gas emissions produced by heating buildings.

As a fleet professional, what are your thoughts on ‘Fit for 55’? Will it change the way your fleet is managed or is it in line with the changes that are happening anyway? Do let us know! Send your thoughts to our Editor in Chief Steven Schoefs.  

Authored by: Frank Jacobs