Controversial European emissions laws for 2035 will be rolled back to allow the sale of a limited number of hybrid combustion engine vehicles under a new proposal submitted to the European Parliament.
Reports earlier this month speculating about a planned move have been proven correct after the European Commission (EC) formally announced plans to implement the legislative changes following pressure from car manufacturers.
Previous emissions regulations would have effectively banned the sale of new internal combustion engine (ICE) vehicles by requiring that all new light vehicles sold must emit “no carbon dioxide emissions (exhaust)”.
Although this will not impact vehicles already on the road, any automakers that exceed their fleet emissions target would face financial penalties.
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The European Union said the year 2035 was chosen, given the typical lifespan of a vehicle in Europe of 15 years, to support the transport sector’s broader goal of becoming climate neutral by 2050.
“The fleet-wide CO2 emissions target for 2035 requires a reduction in emissions by 90 percent (compared to 2021), which in practice means that 90 percent of vehicles will be electric and the principle of technology neutrality is maintained,” says the European Commission proposal.
The emissions from the proportion of vehicles powered by internal combustion engines – be they petrol, diesel, hybrid or plug-in hybrid – would be offset by other measures, such as the use of synthetic and low-emission fuels and the production of “green steel”.
The plans also include promoting smaller battery-electric vehicles made in the EU with “super credits” to fend off an influx of competition from China.
As reported by Automotive NewsIn 2026, the Commission will submit the changes to the European Parliament.
“We hope that an agreement can be reached as quickly as possible to ensure stability,” said Stéphane Séjourné, executive vice-president of the commission.
Many automakers had pushed for a change to the proposed rules, citing slower-than-expected adoption of electric vehicles (EVs) and a lack of charging infrastructure as key factors.
That’s despite electric vehicles accounting for a 16.4 percent share of new car sales in Europe by the end of October 2025 – twice the 8.2 percent share in Australia through November 30 and more than the forecast 5.3 percent share of US sales in November S&P Global.
While electric vehicle sales are increasing, sales momentum and growth remain in hybrid and plug-in hybrid models, which accounted for 34.6 percent and 9.1 percent of all new vehicle sales in the EU, respectively, by the end of October.
As reported by theBBCThe European Automobile Manufacturers Association had warned that the 100 percent target would have cost the auto industry “several billions” in fines.
Earlier this month, Ford called for its 2035 target to include hybrid models after suffering significant losses on electric vehicles.
Polestar CEO Michael Lohscheller criticized the changes to emissions regulations, arguing that Europe has “not a demand problem, but a trust problem.”
“A fossil fuel-powered car built in 2035 could still be polluting twenty years later. Moving from a clear 100 percent zero emissions target to 90 percent may seem small, but if we back down now we will not only harm the climate, but also harm Europe’s competitiveness,” he said in a statement.
“Electrification will create long-term wealth and jobs for decades to come. Reversing course would do the opposite: extending the lifespan of aging industries for a few short years while the rest of the world moves forward.”
However, larger brands, including Volkswagen, have responded positively to the changes.
“The European Commission’s pragmatic draft proposal for new CO2 targets makes overall economic sense,” Volkswagen said in a statement BBC.
“It is very positive that small electric vehicles will receive special support in the future… Opening the market for vehicles with combustion engines while compensating for emissions is pragmatic and in line with the market.”
Others, including Stellantis – which operates more than a dozen car brands including Jeep, Peugeot, Citroën and Fiat – said the changes were inadequate.
“The proposals do not meaningfully address the issues currently facing the industry,” the company said Reuters.
“In particular, the package does not provide viable development for the light commercial vehicle segment, which is in a critical situation, and the passenger vehicle flexibilities required by the industry for 2030.”
These changes in 2030 include setting average emissions targets for each automaker over three years and for passenger cars and light commercial vehicles.
Stellantis Chairman John Elkann said in November that light commercial vehicles should have their own emissions targets, separate from passenger cars.
A similar argument has been successfully made by car manufacturers in Australia with the introduction of the New Vehicle Emissions Standard (NVES).
The NVES, which came into force on January 1, 2025, sets carbon dioxide emission limits for passenger vehicles such as the Toyota Yaris, with a different measure for light commercial vehicles such as the Ford Ranger.
While the ACT has a 2035 net-zero emissions law in place, it is the only jurisdiction in the country to have adopted such regulations to date, and the Australian government has not set such a target.
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