EU Parliament could soften 2035 CO₂ target
A compromise in the EU Parliament reportedly envisages a 87.5 percent CO₂ reduction for new cars in 2035 instead of zero emissions. That could keep combustion engines and hybrids possible.
Parliamentary compromise instead of adopted law
Negotiators from the EPP, S&D and Renew Europe have reportedly agreed on a compromise to reform the CO₂ limits for new passenger cars. Under it, average CO₂ emissions from new cars would fall by 87.5 percent by 2035 compared with the 2021 base year. That would be less strict than the current target of allowing no greenhouse gases in operation from 2035. With such a remaining budget, new combustion-engine and hybrid cars could in principle still be eligible for registration after 2035. For manufacturers, the risk of having to pay high penalties for missing fleet limits would also fall.
The status is provisional: the compromise is not yet adopted law and must first be confirmed within the participating political groups. Only after that can it become a Parliament position for further negotiations. The current framework aimed for a 100 percent reduction from 2035 and would effectively have pushed new combustion-engine cars out of the market. A target of 87.5 percent would not force a complete switch to battery-electric new cars. For buyers, that could mean a broader range of offerings; actual demand, however, will continue to depend on prices, charging infrastructure and operating costs.
Green steel could be credited
The compromise also provides for a mechanism for climate-friendly steel production. Under the plans, a 95 percent reduction target would be linked to a bonus: manufacturers using green steel would be allowed to deviate from the target by a further 7.5 percentage points. The regulation would therefore look not only at emissions in vehicle operation, but also indirectly take part of the supply chain into account. Mercedes says it has used green steel since 2025.
Next steps
The EU Parliament’s transport and industry committees are due to vote this Thursday on their assessment of the reform, with the lead environment committee to follow in early November. The plenary is expected to set its position in December. Only once both Parliament and the Council of EU member states have each adopted a line by majority can the final negotiations begin; under this timetable, a final compromise could be discussed early next year. In the Council, Germany and France recently outlined a position that provides for a 90 percent reduction in new-car emissions by 2035, but without an offset through green steel.
