The European Union struck a deal on Thursday on a law to effectively ban the sale of new petrol and diesel cars from 2035, aiming to speed up the switch to electric vehicles and combat climate change.

Negotiators from the EU countries and the European Parliament, who must both approve new EU laws, as well as the European Commission, which drafts new laws, agreed that carmakers must achieve a 100-percent cut in carbon dioxide (CO2) emissions by 2035, which would make it impossible to sell new fossil fuel-powered vehicles in the 27-country bloc.

The deal also included a 55-percent cut in CO2 emissions for new cars sold from 2030 versus 2021 levels, much higher than the existing target of a 37.5-percent reduction by then.

Cars currently account for 15 percent of all CO2 emissions in the bloc, while transportation overall accounts for around a quarter.

With regulators increasing the pressure on carmakers to curb their carbon footprint, many have announced investments in electrification. Volkswagen boss Thomas Schaefer this week said that from 2033, the brand will only produce electric cars in Europe.

However, conservative lawmakers and Germany had shown reluctance over some of the targets, fearing the costly burden it will place on EU automakers competing against global rivals.

Meanwhile, China, the world's biggest automobile market, plans to raise the proportion of new energy vehicles in the new car sales to 20 percent by 2025. The goal was set in 2020, and by now market insiders widely believe the country will hit the target ahead of schedule.

Chinese carmakers, including BYD and Great Wall Motor, are looking to gain a foothold in the EU and have recently scored high safety ratings for their electric vehicles.

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(With input from AFP, Reuters)