The European Parliament on Tuesday formally approved a law to effectively ban the sale of new petrol and diesel cars in the European Union from 2035, aiming to speed up the switch to electric vehicles and combat climate change.

The landmark rules will require that by 2025 carmakers must achieve a 100 percent cut in CO2 emissions from new cars sold, which would make it impossible to sell new fossil fuel-powered vehicles in the 27-country bloc.

The law will also set a 55 percent cut in CO2 emissions for new cars sold from 2030 versus 2021 levels, much higher than the existing target of 37.5 percent.

"The operating costs of an electric vehicle are already lower than the operating costs of a vehicle with an internal combustion engine," Jan Huitema, the parliament's lead negotiator on the rules, said, adding that it was crucial to bring more affordable electric vehicles to consumers.

Also read: Maruti accounts for 60% of Suzuki’s global car production, 45% of its profitability

EU countries agreed the deal with lawmakers last October, but still, need to formally rubber stamp the rules before they can take effect. Final approval is expected in March.

New vans must comply with a 100 percent CO2 cut by 2035, and a 50 percent cut by 2030, compared with 2021 levels.

Many carmakers in Europe have announced investments in electrification.

Volkswagen chief executive Thomas Schaefer said last year that from 2033 the brand will only produce electric cars in Europe.

Still, the EU law met resistance from some industries and countries when it was proposed in July 2021. As a result, the final deal includes some flexibilities including that small carmaker producing less than 10,000 vehicles per year can negotiate weaker targets until 2036.

The car CO2 law is part of a broader package of tougher EU climate policies, designed to deliver the bloc's targets to slash greenhouse gas emissions this decade.

Also Read: Renault and Nissan to invest $600 million in India and launch 4 SUVs, 2 EVs