It will be a do or die situation for automakers in Europe if their diesel/petrol ICE engines are unable to comply with the proposed emissions legislation proposed by European Union within the time frame allotted that works out to around 13 years from now.

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.

The deal if effected into law will mean ban the sale of new petrol and diesel cars from 2035. This law is aimed to speed up the switch to electric vehicles and combat climate change, according to media and agency reports.

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 CO2 emissions by 2035, which would make it impossible to sell new fossil fuel-powered vehicles in the 27-country bloc.

"This deal is good news for car drivers... new zero-emission cars will become cheaper, making them more affordable and more accessible to everyone," Parliament's lead negotiator Jan Huitema said.

EU climate policy chief Frans Timmermans said the agreement sent a strong signal to industry and consumers. "Europe is embracing the shift to zero-emission mobility," he said.

(With inputs from Reuters and other agencies)