Kemi Badenoch, the Business Secretary, is pushing Cabinet colleagues to water down net zero rules on electric cars that come into force in January.
Car manufacturers are warning they will not be able to hit a requirement that 22 per cent of new vehicles they sell in 2024 must be zero emission models that are completely electric.
A manufacturer will be fined £15,000 for every polluting car sold over the limit, unless they can somehow buy in extra allowances from another company.
Mrs Badenoch is understood to be concerned about the requirement, known as the zero emissions vehicle (Zev) mandate.
A spokesman for Mrs Badenoch said: “If major car companies employing thousands of people are saying that there’s a problem, then it’s her job to look at ways to ease that problem.”
Net zero has become a central issue for both the Conservatives and Labour, with Rishi Sunak under mounting pressure to delay the 2030 ban on the sale of new petrol and diesel vehicles.
Last week, The Telegraph revealed that Honda and Toyota were publicly urging a softening of the rules amid fears that they would be breached if implemented as planned.
Mrs Badenoch’s spokesman was also quoted saying “Honda and Toyota are not the only manufacturers who have raised concerns” and “Kemi has been raising their concerns with colleagues in the Cabinet”.
The accuracy of the remarks, first reported by the Politico website, was not disputed by the Business Department.
The Telegraph understands that government ministers are looking at new “flexibilities” to help with the crunch, but are committed to the introduction of the quota.
Despite the rules coming into force in just five months, the Transport Department has still not revealed its full approach of how it will oversee the scheme.
Zev mandate
The Zev mandate is part of a wider set of rules to phase out petrol and gas cars and help hit the Government’s legal target of making the UK a net zero carbon emitter by 2050.
The UK ban on the sale of new petrol and diesel cars is due in 2030, five years earlier than the European Union. Mr Sunak has recommitted to the date despite pressure from his own party, with more than 40 Tory MPs and peers last week writing to the Prime Minister calling for the deadline to be pushed back.
New hybrid cars, which run partly on fuel and partly on electricity, can be sold until 2035, though the exact way they are phased out between those dates is to be determined.
Only the sale of new models is not allowed after those dates. Second-hand petrol and diesel cars can still be sold.
The Zev mandate sees a percentage figure set for each year for what proportion of a car manufacturer’s new UK sales must be zero emission models.
The figure required is due to start at 22 per cent in 2024 and then increase to 80 per cent in 2030. A source close to policy discussions has insisted those figures will not change.
But there is open debate between officials and ministers about a variety of proposals for easing the impact of the rules.
Many involve the complicated system of emissions allowances. Others look at the speed at which the requirement level rises between 2024 and 2030.
Blackouts under Labour
In a separate development, Grant Shapps, the Energy Secretary, warned that blackouts could occur as a result of Labour’s pledge not to approve new exploratory oil and gas drilling licences in the North Sea.
Writing in The Telegraph, Mr Shapps said: “Their insane plan to ban British oil and gas that will shoot our economy and security in the foot, or their impossible plans to decarbonise the electricity system by 2030 that could literally plunge Britain into darkness and many into poverty – their approach to net zero is too extreme, risks too much and is too fast for households and businesses to manage.”
In the past, the Labour Party has dismissed such attacks on its policy noting that existing oil and gas wells will still be able to keep extracting into 2050.
Labour figures confirmed that they will not reverse the 100 new oil and gas licences which the Government announced last year and reannounced this week if they win office in 2024.
Sir Keir Starmer is only promising not to issue new explorative oil and gas licences rather than overturn ones issued under the Tories.
Mr Shapps will meet executives from 20 energy firms on Wednesday, as the Conservative Government continues to shine the spotlight on energy policy this week.