European Union countries have given final approval to a landmark law to end sales of new CO2-emitting cars in 2035, after Germany won an exemption for cars running on e-fuels.
The approval from EU countries' energy ministers means Europe's main climate policy for cars can now enter into force - after weeks of delay caused by last-minute opposition from Germany.
The EU law will require all new cars sold to have zero CO2 emissions from 2035, and 55% lower CO2 emissions from 2030, versus 2021 levels. The targets are designed to drive the rapid decarbonisation of new car fleets in Europe.
The European Commission has pledged, however, to create a legal route for sales of new cars that only run on e-fuels to continue after 2035, after Germany demanded this exemption from the ban.
The EU policy had been expected to make it impossible to sell combustion engine cars in the EU from 2035. But the exemption won by Germany offers a potential lifeline to traditional vehicles - although e-fuels are not yet produced at scale.
E-fuels are produced by synthesising captured CO2 emissions and hydrogen produced using CO2-free electricity. They are considered carbon neutral because the CO2 released when the fuel is combusted is balanced by the CO2 removed from the atmosphere to produce the fuel.
Poland voted against the law this morning. Italy, Bulgaria and Romania abstained.
Poland had called the law unrealistic and said it risked increasing car prices, while Italy had wanted cars running on biofuels to also be exempted from the 2035 phaseout.
Transport accounts for nearly a quarter of EU emissions.
Porsche and Ferrari are among the supporters of e-fuels, which they see as a way to avoid their vehicles being weighed down by heavy batteries.
Other carmakers including Volkswagen, Mercedes-Benz and Ford are betting on battery-electric vehicles to decarbonise, and some firms had urged EU countries not to row back the 2035 phase-out.
EU energy ministers also agreed to extend a voluntary target to curb their gas use 15% for 12 months, to help prepare for next winter with scarce Russian gas.
Some EU officials expected ministers to tackle a dispute over whether nuclear energy should count towards EU renewable energy targets - a question that has split countries and is threatening to delay the EU's main renewables policy.