EU Softens 2035 Combustion Engine Ban, Giving Carmakers More Breathing Room

Committee lawmakers back lower 2035 targets for cars and vans, with low-carbon steel credits adding another path to hit emissions goals.

By: Brian Potter

Nov 9, at 3:49am ET

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The European Parliament's Environment Committee has voted to water down the European Union's 2035 combustion-engine phaseout. Lawmakers approved the plan on November 4, 2026, by a vote of 48 in favor, 30 against and two abstentions, backing a text that would let gas-powered cars stay on sale in reduced numbers past that date.

The committee's text would cut the 2035 CO2-reduction target for new passenger cars from a full 100 percent down to 87.5 percent, with a similar exemption for vans.

Nothing has changed yet for buyers or automakers. This is a negotiating position, not a new law.

What The Committee Actually Approved For Cars And Vans

Car exhaust fumes in traffic during winter

For passenger cars, the committee proposal would lower the 2035 fleet-wide emissions target from a full phaseout to an 87.5 percent reduction versus 2021 levels. Part of the remaining gap can be covered with credits for using low-carbon steel made in the EU, which the committee limits to 7.5 percent of the reference target. That brings the effective figure closer to 95 percent.

Vans get their own numbers, and they diverge further from what's currently on the books. The committee set a 2030 target of 35 percent, well short of the European Commission's own 40 percent proposal and a steep step down from the 50 percent reduction vans face under the rules already in force.

By 2035, the committee would cut the van target from a full 100 percent down to 80 percent, with the same low-carbon-steel credit mechanism available, again capped at 7.5 percent.

Automakers had been split on the original ban when the EU's decision to cancel the combustion ban first split the industry's reaction.

A separate, tighter cap applies in the near term. Between the rules' entry into force and the end of 2034, low-carbon-steel credits are limited to just 3 percent of specific targets for both cars and vans, a much smaller allowance than the long-term 7.5 percent ceiling.

Why Low-Carbon Steel Credits Count Here

BMW Group, steel produced without CO2 emissions

The credit system lets automakers hit a nominally lower target while still getting partial recognition for cleaner manufacturing. Steel production is one of the largest sources of embedded emissions in a vehicle's supply chain. Crediting EU-made low-carbon steel gives manufacturers another lever besides tailpipe output alone.

That's a meaningful shift from the original 2035 framework, which counted only what came out of the exhaust pipe. It also explains why the committee's numbers look softer than a simple side-by-side of the headline percentages would suggest.

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Comments

None of this is settled policy. The committee's vote sets Parliament's negotiating mandate, and that mandate still needs approval from the full Parliament before any talks with EU governments can begin, a step we covered when Brussels first moved to cancel the combustion engine ban outright.

That full Parliament vote is expected in December 2026. Until Parliament votes and any resulting deal clears the remaining legislative steps with the Council, the existing rules, including the original 100 percent targets for both cars and vans, stay exactly as they are.