The EU is pushing back the voting on a CO2 target to 2035. Internal combustion engines might get a pass.
The European Parliament’s Transport Committee will not vote on the European Commission’s automotive package on October 5, 2026. The deadline has been pushed back by about two weeks, with the issue at stake being a relaxation of the CO2 emission target for new cars starting in 2035.
According to “Der Spiegel,” the parties forming the center-right platform need more time to align on a position. A vote by the entire European Parliament is still scheduled for November.
11 g CO2/km instead of zero
The package presented at the end of 2025 changes the fleet emission reduction target from 100% to 90% compared to 2021 levels. The allowable average would thus be 11 g CO2/km, instead of zero. The Commission has not set a new deadline to reach 100% and assumes that after 2035, internal combustion engine cars could account for 27-29% of new registrations.
This is not about a simple ban on selling every internal combustion engine vehicle. The regulations set the average emissions for all new cars from a given manufacturer in the EU, imposing financial penalties for exceeding the limits.
After market changes, plug-in hybrids, range extenders, mild hybrids, and purely internal combustion engine models might remain. However, their emissions would need to be offset. Climate-neutral fuels, including biofuels and controversial e-fuels, could cover up to 3% of the 2021 reference target, meaning 30% of the still-permitted emissions. Green steel produced in the EU could account for another 7%, covering the remaining 70%.
On paper, the math adds up. It is unclear, however, what green steel and e-fuels will cost by 2035 or whether they will be available in quantities sufficient for the automotive industry.
Germany and six other countries with relatively low electric vehicle penetration are calling for greater relaxation of regulations. Spain, France, Denmark, and Belgium want faster electrification. A simple majority in the European Parliament is sufficient to adopt changes, but the EU Council needs support from at least 15 countries representing 65% of the Union’s population.
Small electric vehicles will get a 1.3 multiplier
The compromise also includes incentives for electric vehicle manufacturers. A car shorter than 4.20 meters would be counted as 1.3 cars when calculating fleet emissions. For example, one sold Volkswagen ID. Polo would reduce a manufacturer’s score as if it were 1.3 zero-emission cars. The Commission claims this will accelerate the introduction of smaller and cheaper models.
The intermediate target will be calculated overall for the years 2030-2032, so exceeding the limit in 2030 alone will not result in immediate penalties. The manufacturer will be able to make up for the missing reduction in subsequent years. For trucks, the target for 2030 is set to drop from 50% to 40%
Starting in 2030, member states are also expected to have individual requirements regarding the electrification of corporate fleets. The way these are implemented will remain up to the countries, with Belgium’s tax system cited as a model.
The package also provides 1.5 billion euros for the Battery Booster program to support EU battery production. Applications were opened in July 2026. The Commission also estimates that simplifying bureaucracy will allow the industry to save 706 million euros per year. Truck manufacturers would find it easier to accumulate emission credits before 2030, though specific figures have not yet been presented.
The commission still declares that “the future is electric.” It first needs to get the package approved by the divided Parliament and EU Council. The first test of this compromise has just been postponed by two weeks.
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