Germany and Italy have blown apart an EU plan to ban internal combustion engines by 2035, as the European car industry’s heartlands mount a fightback against ambitious carbon goals.

The two countries, the homes of Volkswagen, Fiat and Ferrari, are demanding exemptions for cars that run on synthetic fuels, potentially cushioning the blow for established industries.

Italy’s deputy prime minister Matteo Salvini described the delay as “a great signal” that rewarded efforts by his hard-right League party. “The voice of millions of Italians has been heard,” he wrote on Twitter.

The setback for Brussels underlines the political clout of the car lobby across Europe and its fears that the green transition will be costly to jobs

Porsche, part owned by VW, has long called for clean fuels that would allow it to sell its engine-powered sports cars for years to come, while Italy’s Ferrari has refused to set an end date for making supercars with engines.

Germany’s Bosch, which supplies engine systems to carmakers all over the world and is regarded as a laggard in battery technology, has also lobbied for synthetic fuels to be considered “clean” technology by regulators.

This week Rome swung behind the German ministry of transport, which had requested the special provisions for so-called e-fuelled cars, bowing to mounting political pressure at home.

E-fuels, which are produced using electricity from renewable hydrogen and other gases, are often considered “carbon neutral”. They can be used in normal combustion engines, thus prolonging the life of Germany’s traditional car manufacturing industry, which makes up about a fifth of the country’s industrial revenues.

“We need e-fuels because there is no alternative to operating our existing fleet in a climate-neutral manner,” Volker Wissing, the German transport minister, told ARD broadcaster.

The change in position at such a late stage has prompted anger among other capitals, which see it as a threat to the EU’s credibility on green legislation. The law had been agreed among member states last year and was approved by the European parliament this month.

The EU’s goals are part of a broader international push for net zero carbon emissions. The UK government has a still more ambitious target of banning sales of petrol and diesel cars from 2030, but concern has mounted in several countries about the impact on jobs of the transition.

The chief executive of Ford said last year that manufacturing electric vehicles will require 40 per cent fewer workers than petrol-powered cars and trucks, largely because EVs contain fewer parts.

Failure to adopt the curbs on combustion engines could severely hamper the EU’s effort to reach climate neutrality by 2050. Poland has already said it plans to vote against the law, and Bulgaria will abstain.

Germany initially agreed to the rules on the condition that the European Commission launched a review within two years into whether cars that run on synthetic or “e-fuels” could be allowed after 2035.

The debate has created deep divisions within German chancellor Olaf Scholz’s three-party government.

Wissing, whose pro-market Free Democrat party is staunchly in favour of the country’s car industry, on Thursday unexpectedly won the backing of the Green-run economics ministry.

German Green MEP Michael Bloss said the postponement of the vote was “an embarrassment for Germany”, adding that it was “creating chaos, making ourselves completely untrustworthy and becoming a brake on climate protection”.

The issue is expected to be raised by EU commission president Ursula von der Leyen when she attends a German government retreat at the weekend.

One person familiar with the discussions said Berlin wanted the commission to “move” by presenting a compromise that would be acceptable to all three German coalition partners. But the person added that no proposal had been received so far.

An EU official said: “It needs to be settled inside the German coalition. The commission is not the referee for internal coalition disputes.”

Additional reporting by Amy Kazmin in London

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