European Union countries have reached a deal backing stricter climate rules that will eliminate carbon emissions from new cars by 2035 and a multibillion-euro fund to shield poorer citizens from carbon dioxide (CO2) costs.
The 27 EU members found a common agreement on Wednesday morning on draft legislation aimed at slashing EU greenhouse gases by at least 55 percent in 2030 compared with 1990 rather than by a previously agreed 40 percent.
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“A long but good day for climate action: The Council’s decisions on Fitfor55 are a big step towards delivering the EU Green Deal,” said Frans Timmermans, the European Commission vice president in charge of the Green Deal, after the meeting of environment ministers in Luxembourg.
The agreement on the five laws proposed by the EU’s executive arm last year paves the way for the final negotiations with the European Parliament.
EU lawmakers are backing ambitious bloc-wide targets and final approval of the legislative package will now require the European Parliament to resolve differences with the bloc’s national governments over various details.
“The Council is now ready to negotiate with the European Parliament on concluding the package, thereby placing the European Union more than ever in the vanguard of fighting climate change,” said Agnès Pannier-Runacher, the French minister for the energy transition.
The decision to introduce a 100 percent CO2 emissions reduction target by 2035 for new cars and vans will effectively prohibit the sale of new cars powered by petrol or diesel in the EU nations.
After fraught negotiations, they agreed to form a 59 billion euros ($61bn) EU fund to shield low-income citizens from the policy’s costs over 2027-32.
Lithuania was the only country to oppose the final agreements, having unsuccessfully sought a bigger fund alongside Poland, Latvia and others concerned the new CO2 market could increase citizens’ energy bills.
Finland, Denmark and the Netherlands – wealthier countries that would pay more into the fund than they would get back – had wanted it to be smaller.
Europe’s leading clean transport campaign group, Transport and Environment, said the EU governments’ agreement is “historic” as it “breaks the hold of the oil industry over transport”.
“It’s game over for the internal combustion engine in Europe,” the group said.
The deal poses a mighty challenge for German automakers, which have long relied on sales of increasingly big, fossil-fuel-guzzling vehicles for their profits.
Following intense haggling within the three-party government, particularly between the environmentalist Greens and the pro-business Free Democrats, German officials voted in favour of the compromise overnight.
The German government said the deal will also see the European Commission make a proposal that will allow cars which run exclusively on climate-neutral e-fuels to continue to be sold after 2035.
“This is a huge step forward and steers the transport sector onto the path of climate neutrality,” said German Environment Minister Steffi Lemke, a member of the Greens.
By declaring that only cars and light utility vehicles which emit no CO2 can be sold from 2035, “we are sending a clear signal that we need to meet the climate targets. This gives the car industry the planning security it needs,” she said.
The EU wants to drastically reduce gas emissions from transport by 2050 and promote electric cars, but a report from the bloc’s external auditor showed last year that the bloc is lacking the appropriate charging stations.
Transport accounts for about 25 percent of all greenhouse gas emissions in the EU.
In addition to the landmark agreement on cars, the package also features a reform of the EU’s carbon market and the creation of a social climate fund to help vulnerable households cope with the planned clean-energy revamp.
That particular issue has become more politically sensitive as Russia’s war in Ukraine has sent fuel prices soaring.
The overall goal is to put the EU on track to become climate-neutral in 2050 and to prod other big polluters, including the United States and China, to follow suit.