The European Union’s long-planned 2035 ban on new combustion-engined cars has taken a decisive turn, with top legislators proposing a major rethink that could keep ICE vehicles on sale well beyond the middle of the next decade.
Following months of intensive lobbying from national governments and some of Europe’s most influential car makers—including Volkswagen Group, Renault, Mercedes-Benz, BMW and Stellantis—the European Commission (EC) has unveiled more flexible emissions rules that stop short of a total prohibition on non-electric vehicles.
Under the revised proposal, total tailpipe CO₂ emissions from new cars sold from 2035 would need to be cut by 90% compared with 2021 levels, rather than the previously mandated 100%. That final 10% may sound marginal, but it fundamentally changes the landscape: a 100% reduction would have effectively outlawed the sale of new petrol and diesel cars, while the new threshold allows both hybrid and pure ICE models to continue—at least in theory.
The EC has made it clear that the remaining emissions gap will need to be offset through alternative measures, including the use of biofuels, e-fuels and low-carbon materials produced within Europe. One notable addition is the inclusion of “green” steel in the regulatory framework, with manufacturers set to receive additional credits toward their emissions targets if they use low-carbon steel in vehicle production.
How these offsets will work in practice remains unclear, and many of the technical details have yet to be defined. However, the direction of travel is evident: emissions compliance will no longer be judged solely at the tailpipe, but increasingly across the entire manufacturing ecosystem.
At the same time, the Commission is doubling down on electric mobility where it sees the most immediate impact. Small electric cars built under new M1E regulations within the EU will be awarded so-called “super credits,” giving manufacturers extra incentives to develop affordable, compact EVs aimed at mass-market buyers.
Despite the softer headline, the proposals retain a sharp edge. Carmakers that fail to meet their revised emissions targets face fines that could run into the billions, ensuring that compliance remains a serious financial consideration rather than a symbolic gesture.
Perhaps the most striking element of the proposal is what it doesn’t include: an end date for the sale of ICE vehicles. By removing a hard stop, the EC has left the door open for combustion engines to remain part of Europe’s automotive mix indefinitely—provided manufacturers can meet increasingly complex emissions and offset requirements.
The focus is also shifting toward corporate fleets, which account for a significant share of new vehicle registrations. EU member states will be required to set targets ensuring that a specific proportion of new cars and vans registered by large corporations are zero-emissions by 2030. While neither the exact percentage nor the definition of a “large corporation” has been finalised, the Commission believes this approach will accelerate EV adoption while feeding more low-mileage electric vehicles into the used-car market for private buyers.
The proposals still require formal approval from the European Parliament, but the EC expects the legislation to move quickly once presented to member states early next year. If adopted, the changes would mark a significant recalibration of Europe’s automotive strategy—less an abrupt break with combustion engines, and more a gradual, tightly regulated transition that gives manufacturers room to adapt while keeping emissions firmly in check.
Source: Automotive News