Germany rejected a proposal by Italy to bring forward a planned European Union review of the bloc's ban on the sale of new internal combustion engine cars from 2035, saying it would lower standards and cause uncertainty for industry.

"Germany will not entertain discussion on potentially watering down the European CO2 emission performance standards ... the German government does not support the Italian government's proposal," German Environment Minister Steffi Lemke said in comments to Reuters on Wednesday.

In March 2023, EU countries approved a landmark law that will require all new cars to have zero CO2 emissions from 2035, effectively banning diesel and petrol engines and allowing electric vehicles (EVs) to dominate.

Ahead of that deadline, automakers face tougher CO2 targets in 2025 as the cap on average emissions from new vehicles sales falls to 94 grams/km from 116g/km in 2024.

Exceeding CO2 limits can lead to fines of 95 euros per excess CO2 g/km multiplied by the number of vehicles sold.

That could lead to penalties of hundreds of millions of euros for large carmakers, particularly as sales of battery-electric cars have slowed across the region.

The EU Commission scheduled a review of the legislation for 2026 to assess the technological advances of hybrid cars and whether they can comply with the 2035 goal.

Europe's auto association ACEA urged the Commission in mid-September to bring forward the review targets to give carmakers some relief from the measures, saying the necessary conditions to boost their electric sales - including charging infrastructure, cheaper energy, tax incentives, and raw material supply - were not in place.