The European Commission has unveiled a plan to lift the EU’s effective ban on new combustion-engine cars from 2035 (European Commission press release, 16/12/2025). Under the proposal, EU targets would shift to a 90% reduction in CO2 emissions from 2021 levels, replacing the current rules that require all new cars and vans to be zero-emission from 2035.
In practice, automakers would still be able to sell a limited number of polluting vehicles, ranging from plug-in hybrids (PHEV) to diesel cars, beyond 2035. To do so, they would need to offset the climate-warming emissions from these vehicles (the remaining 10% emissions) using two types of carbon credits:
- The first type would be generated through the use of Europe-made, low-carbon steel in car manufacturing.
- The second type would come from the consumption of e-fuels and biofuels.
The plan also introduces a three-year window from 2030 to 2032 for automakers to reduce car CO2 emissions by 55% from 2021 levels, while the 2030 target for vans would be relaxed from 50% to 40%.
The proposal still requires approval from EU governments and the European Parliament.
Interested in Global Energy Research?
Enerdata's premium online information service provides up-to-date market reports on 110+ countries. The reports include valuable market data and analysis as well as a daily newsfeed, curated by our energy analysts, on the oil, gas, coal and power markets.
This user-friendly tool gives you the essentials about the domestic markets of your concern, including market structure, organisation, actors, projects and business perspectives.