EU weighs scheme to allow combustion-engine vehicles after 2035, Handelsblatt reports

The European Commission is weighing a new compensation scheme that could allow car makers to sell combustion-engine vehicles beyond 2035, Germany's Handelsblatt newspaper reported on Tuesday, citing senior Commission sources.

Under the proposed framework, up to 30% of climate targets could be met through alternative fuels, while approximately 70% would be achieved using green steel, the report said.

Discussions over the precise accounting rules are ongoing, Handelsblatt quoted sources close to the negotiations as saying.

The report comes ahead of the Commission's official legislative proposal, also due on Tuesday, following lobbying efforts from Germany, Italy, and the automotive industry that prompted Brussels to ease its proposal for a full ban on new combustion-engine cars.

The mechanism under consideration could result in effective emissions reductions of 90%, Handelsblatt said, with CO2 offsets allowing the continued sales of combustion-engine vehicles.