The European Parliament on Tuesday approved a law that will phase out combustion engine cars -- a move that will drastically reshape the bloc's auto industry.
The regulation will require that by 2035 automakers must achieve a 100 percent cut in CO2 emissions from new cars sold, which will make it impossible to sell new fossil fuel-powered vehicles in the 27-country bloc.
It also sets a 55 percent cut in CO2 emissions for new cars sold from 2030 versus 2021 levels, much higher than the existing target of a 37.5 percent. New vans must comply with a 100 percent CO2 cut by 2035, and a 50 percent cut by 2030, compared with 2021 levels.
The regulation was approved by the parliament with 340 votes in favor, 279 against and 21 abstentions.
Jan Huitema, the parliament's lead negotiator on the rules, said: "This regulation encourages the production of zero- and low-emission vehicles. It contains an ambitious revision of the targets for 2030 and a zero-emission target for 2035, which is crucial to reach climate neutrality by 2050."
The targets "create clarity for the car industry and stimulate innovation and investments for car manufacturer," Huitema added in a statement.
"Purchasing and driving zero-emission cars will become cheaper for consumers and a second-hand market will emerge more quickly. It makes sustainable driving accessible to everyone," he said.
EU countries agreed the deal with lawmakers last October, but still need to formally rubber stamp the rules before they can take effect. Final approval is expected by the European Council in March
The law met resistance from some industry and countries when it was proposed in July 2021. As a result, the final deal includes some flexibilities including that small automakers producing less than 10,000 vehicles a year can negotiate weaker targets until 2036.
The EU's plan has global ramifications. As the world's largest trade bloc, the EU has a reputation for setting standards globally and is home to many some of the biggest car manufacturers including Volkswagen and Mercedes-Benz.
In a sign of the change, Ford said on Tuesday it will cut about 3,800 jobs across Europe, with workers in Germany and the UK set to be the hardest hit. Ford is axing long-established combustion models including the Fiesta and Focus and plans to sell a smaller lineup of full-electric cars in Europe by 2030.
Most other automakers selling cars in Europe plan to become electric-only before the 2035 deadline,
VW brand boss Thomas Schaefer said last year that from 2033 the brand will only build full-electric cars in Europe
Reuters and Bloomberg contributed to this report