The European Commission has announced significant amendments to its landmark 2035 prohibition on new petrol and diesel vehicle sales, following sustained pressure from automotive manufacturers and several member state governments including Germany and Italy.
The original regulatory framework mandated that manufacturers ensure 100 percent of cars and vans produced from 2035 onwards achieved zero emissions. The Commission confirmed on Tuesday that this requirement will now be reduced to 90 percent, permitting continued production of a proportion of plug-in hybrid electric vehicles and potentially conventional combustion engines beyond the original deadline.
The revised approach incorporates compensatory mechanisms whereby the 10 percent of production not meeting carbon neutrality standards must be offset through alternative environmental measures at manufacturing facilities. These include utilising green steel produced within Europe or employing biofuels in non-electric vehicles.
The Commission stated that the modification “will allow for plug-in hybrids, range extenders, mild hybrids and internal combustion engine vehicles to still play a role beyond 2035, in addition to full electric and hydrogen vehicles.”
The regulatory relaxation extends to electric vans, with carbon emission reduction targets for 2030 lowered from 50 percent to 40 percent. The decision follows lobbying efforts by German chancellor Friedrich Merz and Italian prime minister Giorgia Meloni, representing a notable concession to the European automotive sector, which has encountered substantial difficulties transitioning to electric powertrains whilst confronting intensified competition from Chinese manufacturers.
The Green party within the European Parliament has condemned the amendments, characterising them as a substantial weakening of legislation designed to reduce European emissions. European Commission President Ursula von der Leyen, who championed the original green deal and emissions regulation in 2022, maintained that “Europe remains at the forefront of the global clean transition.” She noted the proposals, which require European Parliament approval, emerged from “intense dialogues with automotive sector, civil society organisations and stakeholders.”
The Commission’s broader package includes new incentives targeting small car production, the most prevalent vehicle category across Europe. Until 2035, manufacturers will receive “super credits” as encouragement to produce compact, affordable electric vehicles, with each unit counting as 1.3 cars within EU quotas, enabling manufacturers to accumulate emissions credits.
The measures also incorporate provisions to stimulate electric vehicle demand from large corporate purchasers, identified as critical to accelerating EV adoption given that commercial fleets represent a principal source of secondhand market supply.
