The big picture: The European Union finally approved a law that will put traditional combustion engine cars out of the market. The Union had to overcome last-minute opposition from Germany, and other countries pushing for alternative solutions like Italy will have to deal with the aftermath of the final agreement.

Starting in 2035, new cars sold in Europe will have to use alternatives to combustion fuels. The European Union recently took the unprecedented decision to ban sales of traditional vehicles based on combustion engines, with a novel approach destined to radically change the automotive market in the Old Continent.

European Union countries recently gave their final approval, weeks after German opposition to the original draft brought the discussion to a standstill. Berlin wanted an exemption for cars running on e-fuels, which was ultimately granted by the European Commission.

E-fuels or electrofuels are a class of synthetic fuels produced using carbon dioxide or carbon monoxide captured from the atmosphere, mixed together with hydrogen obtained from other sustainable sources such as wind, solar and nuclear power. The e-fuel manufacturing process uses the same amount of carbon dioxide which will be released into the atmosphere when the fuel is burned, providing e-fuels an overall low carbon footprint compared to traditional fuels refined from crude oil.

Together with the outright ban on sales of traditional cars in 2035, e-fuels should help the EU adopt a climate-neutral approach to mobility. Frans Timmermans, head of Europe's climate policy, said the "direction of travel is clear: in 2035, new cars and vans must have zero" or very low CO2 emissions.

Starting in autumn 2023, Brussels' Commission will have to decide how sales of e-fuel cars will continue after 2035. The new vehicles must be equipped with a technology designed to prevent the engine from starting if "illegal" petrol of diesel is employed in place of "lawful" e-fuels.

Porsche and Ferrari were among the companies supporting the e-fuel exemption, while the giants of Europe's automotive market (Volkswagen, Mercedes-Benz, Ford) are going all-in with batteries and electric vehicles. Poland voted against the 2035 phaseout, while Bulgaria, Romania and Italy abstained. Italy was one of the biggest losers after the final decision, as Rome's government was proposing an alternative solution based on biofuels extracted from biomass - a solution which was ultimately rejected by the EU.