Europe's combustion-engine reprieve is taking shape, but the latest proposal goes further than the European Commission's original plan. A new agreement between lawmakers would give automakers more flexibility to keep selling ICE-powered vehicles after 2035, marking another retreat from the bloc's original, and rather unrealistic, zero-emissions target.

The compromise, reached by representatives of the European People's Party (EPP), the Socialists and Democrats (S&D), and Renew Europe, would require automakers to reduce average CO₂ emissions from new cars by 87.5 percent compared with 2021 levels by 2035. That's less stringent than the European Commission's proposal from last December, which called for a 90 percent reduction.

The new arrangement would allow manufacturers to use credits for low-carbon steel produced in the EU to offset part of their emissions obligations. This would effectively preserve room for combustion-engine and hybrid vehicles beyond 2035. However, the final rules would determine exactly how many and what types of vehicles could remain on sale.

It's an important distinction from last year's announcement. While the Commission's December 2025 proposal already backed away from the original 100 percent emissions-reduction target, the latest parliamentary compromise would loosen the proposed requirements further.

Under the rules adopted in 2023, the EU set a highly controversial 100 percent reduction target for CO₂ emissions from new cars and vans by 2035, effectively ending the sale of new tailpipe-emitting vehicles from that point onward. Existing gasoline and diesel cars would not have to be taken off the road.

After sustained pressure from automakers and governments, particularly Germany and Italy, the European Commission proposed a softer approach in December 2025 .

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