From watering down a 2035 ban on new petrol and diesel cars to requiring companies to buy low-emission vehicles, here are the main proposals put forward by the European Commission:

- Banned no more -

The EU will weaken a 2035 ban on new cars with internal combustion engines.

Carmakers will now have to cut exhaust emissions from new vehicles by 90 percent from 2021 levels.

In practice, they will be allowed to sell a limited amount of polluting vehicles -- from plug-in hybrids to diesel cars -- past 2035, under stringent conditions.

The emissions produced by these vehicles will need to be offset by two types of carbon credits

The first will be generated by the use of made-in-Europe, low-carbon steel and the second tied to the amount of e-fuels and biofuels that energy companies put on the market every year.

- Green corporate fleets -

To boost EV sales, companies with more than 250 employees or 50 million euros ($59 million) in revenue, including car rental firms, will be required to green their fleets.

Every EU country will have a target for its businesses to purchase a minimum share of zero- or low-emission vehicles when renewing their fleets.

The baseline will be around 30 percent, according to commission officials, with the bar set higher for richer nations.

Corporate fleets account for about 60 percent of new cars sold in Europe.

- Support for battery makers -

Brussels will provide 1.5 billion euros in interest-free loans to support European battery producers, which struggle to compete in a market dominated by China.

- Small European EVs -

The commission set out measures to boost production and sales of small, "affordable" EVs defined as cars shorter than 4.2 meters in length.

Such vehicles, when made in the EU, will grant carmakers "super credits" in the run-up to 2035.

In an accounting trick that would make reaching emission targets easier, small EVs will be counted 1.3 times, thus artificially boosting the share of zero-emission vehicles in automakers' fleets.

These cars will also come under a new labelling category that will allow EU countries and local authorities to develop targeted incentives to stimulate uptake.

- Support for 'Made in Europe' -

The commission said it wants to introduce a "European preference" pushing manufacturers that receive public subsidies to source components from within the bloc.

Carbon credits linked to low-carbon steel produced in Europe, as well as support measures for the battery industry, go in this direction and further measures are expected to be put forward early next year.

- Vans and trucks -

The commission proposed reducing the interim 2030 emission target for vans from 50 to 40 percent and allowing truck manufacturers more time to meet their own 2030 target, in line with a previous concession to automakers.

This comes as EV sales in both categories have been lagging behind.

fpo-ub/ec/rl

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