(Reuters) Negotiators from the EU countries and the European Parliament, who must both approve new EU laws, as well as the European Commission, which drafts new laws, agreed that carmakers must achieve a 100% cut in CO2 emissions by 2035, which would make it impossible to sell new fossil fuel-powered vehicles in the 27-country bloc.
"This deal is good news for car drivers... new zero-emission cars will become cheaper, making them more affordable and more accessible to everyone," Parliament's lead negotiator Jan Huitema said.
EU climate policy chief Frans Timmermans said the agreement sent a strong signal to industry and consumers.
"Europe is embracing the shift to zero-emission mobility," he said.
The deal also included a 55% cut in CO2 emissions for new cars sold from 2030 versus 2021 levels, much higher than the existing target of a 37.5% reduction by then.
New vans must comply with a 100% CO2 cut by 2035, and a 50% cut by 2030 compared with 2021 levels.
With regulators increasing the pressure on carmakers to curb their carbon footprint, many have announced investments in electrification. Volkswagen boss Thomas Schaefer this week said that from 2033, the brand will only produce electric cars in Europe.
Still, the EU law met some resistance when it was proposed in July 2021, with European car industry association ACEA warning against banning a specific technology and calling for internal combustion engines and hydrogen vehicles to play a role in the low-carbon transition.
Negotiators agreed on Thursday that the EU will draft a proposal on how cars that run on "CO2 neutral fuels" could be sold after 2035.
Small carmakers producing less than 10,000 vehicles per year can negotiate weaker targets until 2036, when they would face the zero-emission requirement.
The law is the first to be finalised from a broader package of new EU policies, designed to deliver the bloc's targets to cut greenhouse gas emissions.
Brussels is seeking deals on two more laws from the package in time for the United Nations climate negotiations in November, in a bid to show that despite a looming recession and soaring energy prices, the bloc is pressing ahead with its climate goals.
