Combustion engine ban threatens ‘grave crisis’ for Europe, Italy says

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Italy’s industry minister said the “Green Deal” EU ban on the sale of new combustion engine cars after 2035 had created a “grave crisis” for European carmakers, and must be urgently reviewed and revised.

Adolfo Urso, a member of Prime Minister Giorgia Meloni’s Brothers of Italy party, warned hundreds of thousands of European car manufacturing jobs were at risk unless Brussels eased its ambitious environmental goals for the automotive sector.

“The road map of the Green Deal, as it was designed, has already demonstrated its contradictions with the collapse of the European electric vehicle market and the grave crisis of European carmakers,” Urso said in an interview. “The data speaks for itself. It’s already clear the road map . . . is not sustainable.”

Urso will use high-level meetings in Brussels this week to demand an urgent review of emissions rules and the 2035 combustion engine ban, which he said should be delayed and eased to allow for the sale of other forms of clean technology vehicles, including those using biofuel or synthetic fuel.

Italy’s push comes amid anxiety in European capitals and warnings from manufacturers that the continent’s car industry — already under pressure from cheaper Chinese electric vehicle imports — could decline sharply once the ban on the sale of new combustion engines comes into force.

The country’s biggest carmaker, Stellantis, has suspended car production at its historic Turin plant for a month, until mid-October, because of weak demand for the electric version of its Fiat 500, which is priced at €30,000, compared with €17,700 for the hybrid version. Volkswagen, Germany’s largest carmaker, recently warned workers it would no longer honour its decades-old job guarantee. An estimated 165,000 people work in Italy’s automotive industry, and about 780,000 in Germany.

Car production in Italy fell more than a third in the first seven months of the year, compared with the same period of 2023, according to Italy’s National Auto Industry Supply Chain Association. Hybrid vehicle sales were up 16 per cent in Italy in the January to August period, compared with last year’s equivalent period, while electric vehicle sales were down 12 per cent.

Urso said electric vehicles “cost too much compared to the incomes of Europeans and Italians” and warned Europe’s rushed embrace of electric vehicles — without first developing its own domestic supply chains — could leave the bloc over-reliant on China.

“The risk is we pass from dependence on Russian fossil fuels to dependence on critical raw materials coming from, produced by, or processed in, China,” Urso said. Europe had to consider the “strategic autonomy” of its productive capacity in case of further wars or another pandemic, he added.

While Europe is due to review the ban on new combustion engines in 2026, Urso expressed optimism that European Commission president Ursula von der Leyen would accelerate that process, given the looming threat of job losses.

Failure to do so could spark unrest similar to recent protests by European farmers against the Green Deal.

“Everyone is aware that if we don’t move in a hurry, within a few months, that in Brussels, Strasbourg and other European capitals, we’ll find not only farmers with their tractors, but also workers,” Urso said. “We’re starting to feel this atmosphere across Europe.”

Italy spent nearly €1bn this year on financial incentives aimed at encouraging consumers to replace petrol and diesel cars with electric vehicles, especially those made in Italy, but incentives were exhausted within nine hours of the programme opening. “It’s just a drop in the ocean,” the minister said.

Urso said that if the commission insisted on maintaining the 2035 combustion engine ban, it should provide significant economic resources to accelerate the transition.

“Industry policy and environmental policy must align,” he said. “We agree with the transition towards electric vehicles as long as it’s sustainable.”

Video: The end of the combustion engine? | FT Energy Source