The European Commission has moved to dilute the bloc’s long-standing pledge that all new cars and vans sold from 2035 must be zero-emission, instead setting a looser target that effectively extends the commercial life of combustion-engine vehicles beyond that date. The package, unveiled this week, replaces the outright 100% tailpipe-emissions standard with a system that requires a 90% reduction in average fleet CO₂ emissions by 2035 (from 2021 levels) while allowing manufacturers to offset or compensate the remaining 10%.
Brussels said the revision responds to mounting pressure from member states and the auto industry, which argued that the original 2035 rule did not sufficiently account for current production realities, infrastructure shortfalls and fierce global competition—particularly from cheaper electric-vehicle models made in China. Officials and industry representatives warned that an uncompromising ban risked job losses, supply-chain shocks and higher costs for consumers. The Commission’s proposals therefore aim to keep electrification on track while offering manufacturers flexibility to transition
Under the new approach:
- Carmakers must achieve a 90% reduction in tailpipe CO₂ emissions across their new-car fleets by 2035 compared with 2021.
- The remaining 10% of emissions can be compensated through measures such as using low-carbon steel produced in the EU, adopting authorised biofuels or e-fuels, and other credited technologies or offsets.
- Plug-in hybrids, range extenders and certain mild-hybrid configurations will remain commercially viable beyond 2035 under strict conditions and accounting rules.
The Commission described the package as providing “flexibilities to support the industry and enhance technological neutrality”, while preserving a clear market signal towards electrification. The regulation still needs formal approval by the European Parliament and member states before it becomes law.
Supporters argue the move is pragmatic. Manfred Weber, leader of the European People’s Party in the European Parliament, said the Commission would propose abolishing the effective ban—calling the original policy “a serious industrial policy mistake.” Industry leaders and some national governments, notably Germany and Italy, welcomed the change as necessary to protect jobs and competitiveness.
However, Dominic Phinn, Head of Transport at Climate Group, said: “Today’s a tragic win for the entrenched power of an industry clinging to the past over a competitive, forward-looking sector ready to drive Europe into a prosperous future,” says, a non-profit that works with some of Europe’s largest companies committed to 100% electric fleets.
“The watering down of the petrol and diesel-engine phase-out flies in the face of leading companies across Europe, who are investing billions in electric fleets and desperately need the stability it provides. And ironically, it jeopardises the automotive industry as it delays the inevitable, putting Europe in a position where it simply won’t compete with other global markets racing towards electric transport at record speed.”
Vicky Read, chief executive, ChargeUK said: “This adjustment does not change the fact that the transition to EVs is happening. The sale of almost all petrol and diesel cars will cease across the EU by 2035 if not before. Any thought of reopening discussion about the UK’s own ZEV mandate, which already contains flexibilities to support car manufacturers, would be a major over reaction putting billions of investment in charging at risk and undermining driver confidence.
“EV sales have been consistently strong in the UK, supported by the mandate and an EV charging industry that is investing billions of pounds in private capital to roll out critical infrastructure ahead of forecasted demand. The UK’s focus should now be on building on this progress and supporting even more drivers to switch. We should not be looking over our shoulder at the rest of Europe but ahead, towards a future where the UK is a clean transport leader.”
The Commission and supporters pointed to several practical reasons for the recalibration:
- Charging and grid constraints: uneven EV charging infrastructure across member states makes a rapid, uniform switch harder.
- Cost pressures: falling subsidies and the higher retail price of EVs in some segments risked slowing consumer uptake.
- Industrial transition risks: abrupt regulatory shifts could cause supply-chain dislocation in countries where internal-combustion manufacturing is significant.
- Global competition: rapid adoption of low-cost EV models in other markets threatens EU manufacturers if they cannot compete on price and scale during the transition.
The proposals must pass the ordinary legislative procedure: a majority vote in the European Parliament and agreement among member states in the Council. That process may see further changes. If adopted, the new regime would still push the market heavily towards battery and hydrogen technologies, but it formalises a role for transitional technologies and compensatory measures beyond 2035. As we reported previously, this decision will put pressure on the UK government to follow suit.
The EU’s revised approach represents a significant policy shift: it keeps the pivot to electrification as policy direction but abandons the prior, iron-clad 2035 ban in favour of a targets-plus-offsets model that allows a small but politically and industrially important role for combustion technologies beyond 2035. Whether that compromise preserves jobs without undermining climate goals will depend on the detail of the offsets, enforcement and the speed of actual EV uptake across Europe.
