Legislation that will effectively ban the production of new combustion engine cars and vans from the year 2035 has been reached by European Union lawmakers.

One of the world's largest trading blocs and home to some of the world's biggest car manufacturers, the EU's decision will have a huge impact on global transport. The legislation will need to be approved by the EU Council and the Parliament in order to be implemented.

New cars have to reduce their emissions by 55 percent and new vans by 50 percent in order to meet the requirements. New cars and vans need to reduce emissions by 100 percent by the year 2035.

Small manufacturers don't have to meet the interim target.

These are the main targets. The final target for reduced emissions will only apply to manufacturers that produce less than 10,000 cars or 22,000 vans annually. The so-called "Ferrari clause" is intended to protect small automakers from being hurt by larger manufacturers.

If these vehicles fall outside the scope of the fleet standards, there is a proposal in the agreement to allow the manufacture of vehicles that run exclusively on CO2 neutral fuels.

Critics have differing opinions on whether the clause is a serious loophole or just a way to appease certain groups in Europe that will not affect the legislations goal of eliminating emissions from EU vehicles. These vehicles must fall outside the scope of the fleet standards in order to take advantage of this carve-out, according to the latter.

EU lawmakers said the wording on the proposal would be changed in order to shed more light on what it means

Dutch centrist politician Jan Huitema, who negotiated on behalf of the European Parliament in writing the deal, said it would create clarity for the car industry.

It's crucial to reach climate neutrality by the end of the century.

The Council and I agreed on an ambitious revision of the targets for 2030. It's important to reach climate neutrality by 2050 and make clean driving more affordable.

The legislation is the first part of the EU's "fit for 55" project. The goal of the package of proposed laws is to make the EU carbon neutral by the year 2050. Land use, green fuels for aviation and shipping, and new funding to develop renewable energy tech are some of the issues that will be addressed in the package.

Other parts of the world are trying to ban new engines. California, the world's fifth biggest economy when compared to nation states, is targeting a ban of new combustion engines for 2035, while the UK plans to ban the sale of these vehicles by 2030. It is believed that other US states will follow California's lead.