EU Parliament's Environment Committee Backs Looser 2035 CO2 Rules

The push to water down Europe's 2035 engine ban just picked up more steam in Brussels. The European Parliament's Environment Committee voted 48 to 30, with two abstentions, in favour of a draft that relaxes CO2 fleet limits for new cars and vans, according to the European Parliament. Two other committees, Industry and Transport, had already waved it through on 22 October with 49-27-5 and 27-18-1 majorities respectively.

The draft comes from negotiators for the conservative EPP, the social democratic S&D and the liberal Renew Europe group, who hammered out a joint position in October. On cars, manufacturers would have to cut new-vehicle CO2 emissions by 95 per cent by 2035 compared with 2021, not 100 per cent. They could shave off another 7.5 percentage points by using climate-friendly European steel as compensation, which would let the target fall to 87.5 per cent in the worst case.

Vans get even more slack. The proposal sets a 35 per cent reduction by 2030, down from 40 per cent in the Commission's text and 50 per cent under current rules, and drops the 2035 goal from 100 per cent to 80 per cent, with the same 7.5-point steel credit available. The three groups say that leaves room for new combustion and hybrid registrations after 2035. Credits for low-CO2 steel would count from the revised regulation's entry into force until the end of 2034, capped at 3 percentage points.

The Commission had already moved this direction at the end of 2025, when its Auto Package answered industry warnings that a hard 2035 ban would deepen the sector's crisis, and pressure from Germany. That draft targeted a 90 per cent CO2 reduction, or 11 grams per kilometre instead of zero, but still demanded full compensation for the last 10 per cent through green steel and climate-friendly fuels. The centre platform's compromise names green steel too, just without the full-compensation requirement.

Italian EPP MEP Massimiliano Salini called the deal a turning point for the European automotive industry. He said approving internal combustion vehicles without offset obligations would stay possible, preserving technological freedom, and argued that cars running exclusively on renewable fuels compliant with the Renewable Energy Directive should count as emission-free, like electric vehicles.

History suggests the fight is not over. The Transport Committee delayed its vote by two and a half weeks in early October because the centre platform needed more time to agree. German Chancellor Friedrich Merz and French President Emmanuel Macron have since settled on a joint 90 per cent target with no compensation, which Spiegel called groundbreaking for the Council vote. France, previously opposed, has apparently switched sides, reportedly in exchange for German backing on Buy European rules. The plenary votes in December, then member states in the Council need a qualified majority of at least 15 countries covering 65 per cent of the EU population.