EU Proposal: Ban on Combustion Engines for New Company and Rental Vehicles by 2030

The European Commission is exploring a significant proposal that would prohibit the use of new combustion engine vehicles for commercial purposes starting in 2030. This initiative has drawn considerable opposition from various stakeholders within the automotive industry.

In light of the pressing need to reduce carbon dioxide emissions, particularly in the transportation sector, the EU is considering measures that could drastically alter the landscape of vehicle registrations. Current statistics indicate that battery-electric vehicles could play a crucial role in achieving the required decarbonization. However, the transition to electric vehicles remains limited, as comprehensive adoption across the EU is still a work in progress.

Reports suggest that the Commission is preparing to restrict rental car companies and large corporations to electric vehicle registrations exclusively by 2030. Yet, experts caution that the likelihood of implementing such a policy is slim.

Discussions have been ongoing in Brussels regarding strategies to minimize carbon emissions within the transportation sector, but no definitive decisions have been made. A spokesperson for the Commission has clarified that no formal conclusions regarding climate proposals for commercial registrations have been established. The industry has expressed interest in refining CO2 standards for corporate fleets, and the Commission is currently assessing the potential impacts of any proposed changes.

Earlier this year, the Commission indicated that it would present a legislative proposal aimed at reducing emissions from company vehicles by the end of the year, considering various technological alternatives. The potential impact of this initiative is particularly pronounced in Germany, where approximately two-thirds of new vehicle registrations are for commercial use. While the proposal targets only large corporations and rental car providers, it could significantly reshape the new vehicle market.

It is essential to note that while the proposal may suggest a ban on combustion engines, it does not constitute a straightforward prohibition. Instead, the regulation would establish a zero CO2 fleet limit, leaving it up to the industry to determine how to achieve this target. Currently, it is clear that reaching this goal with combustion engines is unfeasible, thereby elevating battery-electric vehicles as the primary solution. However, should viable alternatives to electric propulsion emerge, they could still be considered, although the timeline for such developments is rapidly narrowing.

Opposition to the proposed electric vehicle mandate for corporate fleets has surfaced promptly. The German Association of the Automotive Industry (VDA) has been particularly vocal against the idea of mandating electric vehicles for companies and rental services starting in 2030. VDA President Hildegard Müller has criticized the proposed regulations, stating that they reflect a lack of understanding of the necessary adjustments to be made regarding regulatory frameworks. Additionally, Markus Ferber, a member of the European Parliament from the Christian Social Union (CSU), has voiced strong disapproval of the impending regulations, emphasizing the need to avoid such measures.

Currently, no clear majority exists within the European Commission, the European Parliament, or among national governments for implementing such an extensive intervention in the automotive market. The influential automotive industry will undoubtedly express its concerns regarding this proposal through various channels, making it unlikely that the suggestion will advance in its present form or overcome the legislative hurdles needed for successful implementation.