The European Union will ban the production of new fuel cars from 2035

The European Union's main institutions reached an agreement on Thursday (Oct 27) to ban the production of new fuel cars from 2035. The move is aimed at speeding up the electrification transition and tackling climate change.

Negotiators from the European Commission, the European Parliament and EU member states have agreed that carmakers must achieve net zero emissions by 2035. This means that new fuel cars will not be sold within the EU from 2035.

"This is the beginning of a major transition for Europe," said Jan Huitema, the European Parliament's main negotiator.

"With more and more affordable electric cars entering the market, European carmakers are proving that they are ready to catch up," EU climate chief Frans Timmermans said in a statement. The speed with which this has happened in the last few years has been phenomenal."

As the world's largest trading bloc, the EU's role in setting global standards means this historic agreement will have a global impact.

In July last year, the EU released a package of 12 new measures, called Fit for 55, that included expanding the EU carbon market, ending the sale of fuel vehicles, taxing aviation fuel, increasing the share of renewable energy and creating a carbon border tax.

The EU, the world's third largest carbon emitter, aims to cut net greenhouse gas emissions within its borders by 55 per cent from 1990 levels by 2030.

While the automotive sector plays a crucial role in the European economy, accounting for about 7% of the EU's GDP and supporting 14.6 million jobs in the region, the transport sector is also the only sector in the EU with rising carbon emissions. Figures show that transport accounts for a quarter of Europe's greenhouse gas emissions.

The EU's plan to ban fuel cars has also been criticised by some conservative groups, who say it will create a so-called "Havana effect" in which people rush to buy used fuel cars instead of electric ones.

"With today's agreement, the Havana effect is becoming more realistic," said Jens Gieseke, a centre-right European People's Party lawmaker and negotiator. After 2035, our streets could be filled with classic cars because new cars are no longer available or affordable. Today's agreement closes the door on the development of new technologies and puts all eggs in one basket, which is a mistake."