The European Union is abandoning its plan to require all new cars to be zero emission from 2035, replacing the hard ban on combustion engines with a softer emissions target that keeps some fossil-fuel technology alive. Instead of a clean break, the bloc is pivoting to a compromise that still cuts pollution but gives carmakers and drivers more room to stick with hybrids and other transitional options.
The shift marks a major reset of Europe’s flagship climate policy for road transport, with implications for automakers’ investment plans, national politics and the pace of the electric vehicle rollout. It also raises a sharper question for governments and industry alike: how to keep climate goals credible when the most symbolic deadline is no longer a red line.
The original 2035 vision: a clean break with combustion
When European lawmakers first agreed the 2035 rules, the ambition was unambiguous: new passenger cars and light commercial vehicles would effectively have to be zero emission at the tailpipe. The idea was to force a rapid shift away from petrol and diesel, using binding carbon dioxide standards to make anything with an exhaust pipe impossible to sell after that date. That approach was framed as essential to align road transport with the bloc’s wider climate neutrality goals.
Official material on Cars and explains why the sector was in the crosshairs, noting that passenger cars and light commercial vehicles (vans) are respectively responsible for around 16% and 3% of total EU carbon dioxide emissions. Earlier decisions on Reducing car emissions had already set a trajectory, with The EU banning the sale of new cars and vans with combustion engines in order to make the road transport sector climate neutral and linking that to a broader aim to cut greenhouse gas emissions from domestic and international transport. The 2035 endpoint was meant to lock in that trajectory and give industry a clear, non-negotiable finish line.
What has changed: from a ban to a 90 percent target
The political compromise now on the table keeps the 2035 date but fundamentally changes what it means. Instead of mandating that every new car sold be zero emission, the European Commission has replaced the zero-emission mandate with a requirement that fleet emissions fall by “90 percent” compared with the baseline. In practice, that means a limited share of new vehicles with combustion engines can still be sold after 2035, as long as the overall mix meets the tighter standard.
Reporting on the Key Takeaways from the deal makes clear that The European Commission is driving this shift, presenting the “90 percent” reduction as a way to keep pressure on emissions while easing the all-or-nothing nature of the original rule. The same compromise also nods to a role for alternatives such as sustainable fuels, although those remain a secondary part of the package. In political terms, the move allows leaders to say the 2035 framework survives, even as the core promise of a full combustion phaseout is quietly retired.
How the new rules keep combustion engines alive
By moving to a fleet-wide reduction target instead of a blanket prohibition, the EU is creating regulatory space for combustion technology to persist in niche or premium segments. Automakers will be able to balance higher emitting models with a larger share of battery electric vehicles, plug-in hybrids or other low emission cars, as long as the combined performance hits the “90 percent” cut. That is a very different world from a legal environment in which any new car with a tailpipe would have been off limits.
Details emerging from the negotiations indicate that the compromise explicitly leaves room for plug-in hybrids and similar technologies. One account notes that Under the latest deal, automakers could sell plug-in hybrids and range extenders after 2035, with the exact share and conditions still being negotiated. Another description of the package stresses that The EU has eased the 2035 zero-emission target to allow some internal-combustion cars to be sold after that date, a change that some automakers have already praised as a more realistic pathway. The result is a regulatory framework that still tightens the screws on carbon but no longer treats combustion as a relic to be legislated out of existence overnight.
Why Brussels blinked: politics, industry pressure and EV headwinds
The retreat from an outright ban is not happening in a vacuum. European carmakers have been grappling with slowing electric vehicle demand, high battery costs and fierce competition from imported models, particularly at the lower end of the market. At the same time, national governments have been under pressure from workers and regional leaders who fear that a rapid shutdown of engine and gearbox plants would devastate local economies built around combustion-era supply chains.
Accounts of the internal wrangling highlight how national politics shaped the outcome. One analysis of the compromise notes that German internal politics played a central role in softening the rules, with The European Commission ultimately accepting a structure in which some combustion engines are allowed after 2035. Another report from FRANKFURT, Germany describes how European officials on a Tuesday moved to ease their ban on sales of cars with internal combustion engines, linking the decision to broader debates over how to cut emissions from fossil fuels, including options such as storing it underground. Taken together, the reporting paints a picture of a Brussels that is still committed to climate goals but increasingly sensitive to the economic and political risks of moving too fast.
Climate stakes: can a 90 percent cut still hit EU goals?
From a climate perspective, the key question is whether a “90 percent” reduction in fleet emissions is enough to keep the EU on track for its wider targets. Road transport is one of the hardest sectors to decarbonise, and the original 2035 design was built on the assumption that new cars sold after that date would still be on the road in the 2040s and beyond. Allowing a residual share of combustion vehicles means some tailpipe emissions will persist for longer, which in turn forces other sectors or later policy cycles to pick up the slack.
The EU’s own climate planning underscores how central cars and vans are to the overall strategy. The material on Passenger vehicles makes clear that the sector’s 16% and 3% shares of total carbon dioxide emissions are not optional extras in the decarbonisation story. Earlier explanations of how The EU wants to make the road transport sector climate neutral, and to reduce greenhouse gas emissions from domestic and international transport, framed the 2035 ban as a cornerstone of that effort. Replacing it with a “90 percent” target does not automatically derail those ambitions, but it narrows the margin for error and increases the importance of enforcement, complementary measures and future tightening.
Winners: legacy automakers, plug-in hybrids and sustainable fuels
The clearest beneficiaries of the policy shift are the established European carmakers that have invested heavily in electric vehicles but still rely on combustion-based models for much of their profit. For them, the new framework offers breathing space to keep selling high-margin engines in limited volumes while they scale up battery production and bring down costs. It also preserves a role for technologies that sit between pure combustion and full battery electric, which many manufacturers see as a hedge against uncertain consumer demand.
Analyses of the compromise highlight how the “90 percent” target creates room for plug-in hybrids and other transitional technologies to remain part of the mix. The Dec summary of the deal notes that The European Commission’s new approach benefits plug-in hybrids and, to a lesser extent, sustainable fuels, by avoiding a hard cutoff that would have made such investments obsolete overnight. Another account, by Umberto BACCHI AFP, frames the move as an attempt by the European Union to boost the car industry by weakening the 2035 combustion-engine ban and easing the pressure to switch entirely to electric vehicles (EVs). For suppliers of engine components and fuel system technologies, the extension of combustion’s life is also a reprieve that keeps their business models viable for longer.
Losers: pure-play EV makers and climate credibility
On the other side of the ledger, the dilution of the 2035 ban is a setback for companies that bet early and heavily on a fully electric future. Pure-play EV manufacturers, and those legacy brands that moved fastest to phase out combustion, now face a market in which their competitive advantage is less sharply defined. If consumers know that new combustion and plug-in hybrid models will still be available well into the 2030s, some will delay the switch to battery electric, slowing the growth curve that underpinned many investment cases.
There is also a less tangible but politically significant loser: the EU’s reputation as a climate standard-setter. The original 2035 design was held up globally as an example of regulatory clarity, with a simple message that combustion engines had a fixed end date. By stepping back from that clarity, Brussels invites questions about whether other flagship targets might also be softened under pressure. Reporting that the European Commission is set to severely weaken the 2035 combustion engine ban, and that automakers could keep selling plug-in hybrids and range extenders after 2035, underscores how far the bloc has moved from the original promise. For climate advocates, that shift risks turning a once-bold milestone into just another incremental adjustment.
What it means for drivers and the car market
For motorists, the end of a strict 2035 ban means more choice for longer, but also more complexity. Instead of a clear signal that any new car bought in the mid 2030s would have to be fully electric, buyers will face a patchwork of options that includes efficient combustion models, plug-in hybrids and battery EVs, each with different running costs and policy risks. That could slow the second-hand EV market, since fewer people will feel compelled to make an early switch, and it may keep residual values for combustion cars higher than they would have been under a hard ban.
National tax systems are likely to do more of the heavy lifting in nudging behaviour. In the United Kingdom, for example, changes to vehicle taxation are already reshaping incentives, with one analysis noting that Motorists will need to be more discerning when selecting vehicles, as new vehicle excise duty rules make it more important for drivers to consider more eco-friendly options. Similar dynamics are likely across the EU, where national governments can use registration taxes, congestion charges and low-emission zones to keep pushing buyers toward cleaner models even without a blanket EU-level ban. For carmakers, that means navigating a more fragmented policy landscape, with Brussels setting broad emissions targets while member states fine-tune the real-world incentives that shape showroom decisions.
The road ahead: a softer landing or a delayed reckoning?
The EU’s decision to pivot from an outright combustion ban to a “90 percent” reduction target reflects a broader tension in climate policy between ambition and feasibility. On one reading, the new framework is a pragmatic adjustment that keeps the overall direction of travel intact while acknowledging economic and political constraints. It gives The European Commission and national governments room to respond to technological developments, from cheaper batteries to new fuel options, without being locked into a rigid legal endpoint that might have proved impossible to implement evenly across the bloc.
On another reading, the retreat risks storing up problems for later. If the residual share of combustion vehicles allowed after 2035 turns out to be larger than climate models can comfortably absorb, future policymakers will face a choice between tightening the rules again or asking other sectors to cut deeper and faster. The debate captured by European officials in FRANKFURT, Germany, who are weighing options such as storing carbon dioxide underground, hints at how difficult those trade-offs can become. For now, the EU has chosen a softer landing for its car industry and its politics. Whether that proves to be a smart recalibration or a delayed reckoning will depend on how quickly the market, technology and national policies move to fill the gap left by the abandoned ban.
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