The EU Blinked And Gas Cars Live To See Another Generation

• EU will allow ICE and hybrid cars beyond 2035 under new rules.
• Carmakers can offset emissions using fuels and green steel.
• No formal end date now exists for combustion car sales.

Europe’s big plan to end internal combustion by 2035 always seemed a bit like an immovable deadline carved into regulation. Now, that’s over as the European Union is walking back that goal. The European Commission just unveiled a major revision to its automotive regulations, and it adds a lot more flexibility moving forward. 

Read: Looks Like Gas And Diesel Cars Won’t Be Banned In Europe After All

Instead of requiring a 100 percent reduction in tailpipe CO₂ emissions compared to 2021 levels, automakers will now need to achieve a 90 percent reduction from 2035 onward. That remaining 10 percent can be offset using a mix of biofuels, e-fuels, and credits tied to the use of low-carbon steel produced within the EU. 

The full automotive regulation package, formally announced on December 16, will be presented to the European Parliament and Council in 2026 for formal review and approval.

What Happens After 2035?

In practice, this opens the door for pure ICE cars, mild hybrids, plug-in hybrids, and range extenders to continue existing alongside EVs and hydrogen vehicles. Importantly, this revised proposal doesn’t include a new sunset date for combustion engines.

Once the 90 percent target is met, there is no hard legal endpoint for selling ICE-powered vehicles, provided manufacturers can balance their emissions through the approved compensation mechanisms.

Automakers will also benefit from softened 2030 requirements, as emissions targets will now be averaged over the 2030 to 2032 period, offering manufacturers additional flexibility similar to the approach taken with 2025 targets.

Again, all of this is coming in the wake of pressure from industry leaders like BMW, VW, Mercedes, Renault, and Stellantis. Even Ford’s CEO Jim Farley warned the EU that its previous targets were too stringent. It appears as if the corporate powers that be made their voices heard. 

Pressure From the Top

The move follows a year of high-level meetings between EU officials and the auto industry, part of a broader “strategic dialogue” aiming to rebuild trust after years of tension, much of it stemming from the fallout of the VW diesel-emissions scandal.

That said, the EU is not abandoning electrification. The Commission is doubling down on incentives for small, affordable electric cars built in Europe, granting them “super credits” that count more heavily toward manufacturers’ emissions compliance.

A new M1E vehicle category will also simplify regulations for EVs under 4.2 meters (13.7 ft) in length, making it easier for governments to support them with targeted incentives.

Lightening the Load

To give automakers more stability, the Commission is also proposing a 10-year freeze on new vehicle regulations. That pause could significantly reduce compliance complexity and offer clearer long-term planning for product cycles.

In short, the EU isn’t reversing course altogether, but it’s trading the rigidity it once held for a bit more realism. Combustion engines won’t die after 2035; they’ll just be managed more heavily than in the past. 

Alongside the policy update, the Commission is rolling out additional support for European battery production, investment in software-defined vehicles, and new local-content requirements for EVs. These steps are aimed at improving competitiveness, particularly in the face of mounting pressure from Chinese automakers.

The Auto World