"What was approved yesterday constitutes a historic mistake for Europe, because competitiveness is ensured by sustainability, not by loosening our commitments," he said during a climate conference in Madrid.

The combustion-engine ban was hailed as a major win in the fight against climate change when adopted in 2023.

Spain, France and the Nordic countries warned that ditching the commitment risked slowing the shift to electric vehicles, undermining the EU's green agenda and deterring investments in electrification.

But carmakers and their backers have lobbied hard over the past year for Brussels to relax the ban, in the face of fierce competition from China and a slower-than-expected shift to electric vehicles.

Under proposals decried by environmental groups, carmakers will now have to cut exhaust emissions from new vehicles by 90 percent from 2021 levels -- down from an envisaged 100 percent -- with the remainder "compensated" in various ways.

Spain is Europe's second-largest car producer after Germany.

German Chancellor Friedrich Merz has hailed the EU's new proposals, saying "more openness to technology and greater flexibility are the right steps".