The European Union has officially softened its flagship policy to ban the sale of new petrol and diesel cars by 2035, following intense lobbying from major automotive nations and industry leaders.
A Significant Concession to Industry Pressure
Under the original landmark legislation, manufacturers faced a mandatory target of ensuring 100% of new car and van sales had zero emissions by 2035. The European Commission confirmed on Tuesday that this requirement has now been reduced to 90%.
This pivotal shift allows carmakers to continue producing a limited number of plug-in hybrid electric vehicles (PHEVs) and potentially even traditional combustion engine models beyond the 2035 deadline. The move is a direct response to heavy pressure from Germany, Italy, and the wider European car industry, which has voiced concerns over the pace of the transition to electric vehicles (EVs) and growing competition from Chinese manufacturers.
The New "Carrot-and-Stick" Rules
In a compromise described as a "carrot-and-stick" approach, the remaining 10% of production that is not carbon neutral must be offset by other green manufacturing measures. These compensatory actions could include using European-made green steel or powering non-electric vehicles with biofuels.
"This will allow for plug-in hybrids (PHEV), range extenders, mild hybrids, and internal combustion engine vehicles to still play a role beyond 2035, in addition to full electric (EVs) and hydrogen vehicles," the Commission stated.
Furthermore, targets for electric vans have also been relaxed. The requirement for a 50% reduction in carbon emissions by 2030 has been lowered to 40%.
Reactions and Additional Incentives
The decision, which follows lobbying by German Chancellor Friedrich Merz and Italian Prime Minister Giorgia Meloni, has been criticised by Green MEPs who labelled it a "gutting" of crucial climate legislation. European Commission President Ursula von der Leyen, however, defended the package, stating "Europe remains at the forefront of the global clean transition."
Alongside the diluted ban, the Commission unveiled new incentives to boost the production of small, affordable electric cars—Europe's most popular vehicle category. Until 2035, manufacturers will receive "super credits," where each small EV produced will count as 1.3 vehicles towards their emissions quota.
Additional measures aim to stimulate demand from large corporate fleets, seen as key to accelerating EV adoption because they feed the vital second-hand car market.
