BRUSSELS - The EU on Tuesday walked back a 2035 ban on new petrol and diesel cars seen as a milestone in the fight against climate change, as the bloc pivots to bolstering its crisis-hit auto sector.
Under proposals slammed by green groups as an act of "self-sabotage", carmakers will have to cut exhaust emissions from new vehicles by 90 percent from 2021 levels -- down from an envisaged 100 percent.
This means that in practice automakers will still be able to sell a limited number of polluting vehicles -- from plug-in hybrids to diesel cars -- beyond 2035, provided the resulting emissions are "compensated" in various ways.
The EU's industry chief, Stephane Sejourne, insisted the bloc's green ambitions stood intact as he put forward a plan billed as a "lifeline" for Europe's auto industry.
"The European Commission has chosen an approach that is both pragmatic and consistent with its climate objectives," he told AFP.
The combustion-engine ban was hailed as a major win in the climate fight and a key tool to drive investments in electrification when adopted in 2023.
But carmakers and their backers have lobbied hard over the past year for Brussels to relax it, in the face of fierce competition from China and a slower-than-expected shift to electric vehicles (EVs).
Europe's biggest automaker Volkswagen welcomed the move as "pragmatic" and "economically sound", while German Chancellor Friedrich Merz said allowing for "more openness to technology and greater flexibility" was the right step.
Germany's leading auto industry group VDA however called the proposals "disastrous".
Weakening the ban is the most striking result yet of a pro-business push that has seen the EU pare back a slew of environmental laws this year -- on the grounds they risk weighing on growth.
"This backward industrial policy is bad news for jobs, air quality, the climate, and would slow down the supply of affordable electric cars," said Greenpeace Germany's executive director, Martin Kaiser.