Why the EU Is Walking Back Its 2035 Zero-Emissions Commitments and Why I’m Torn
For years, the European Union’s approach to decarbonizing road transport has been one of unwavering ambition (serving a role globally that’s similar to California’s impact on the US). Under the Fit for 55 framework, the EU set a pathway that would require new passenger cars and light vans sold from 2035 onward to have zero tailpipe CO₂ emissions, effectively phasing out internal-combustion engine (ICE) vehicles altogether.
But in late 2025, that narrative shifted.
What’s Changed: From 100% to “90% + Compensation”
The European Commission has introduced a new proposal that would replace the existing 2035 100% tailpipe CO₂ reduction requirement with a 90% fleet-wide reduction target (all are relative to 2021 levels).
Here’s the practical implication:
Cars and vans would still have to reduce average tailpipe CO₂ emissions by ~90% by 2035 — but not be strictly zero-emission vehicles.
The remaining 10% of emissions could come from combustion-engine vehicles or hybrids, as long as automakers “compensate” for those emissions.
Compensation would come through low-carbon materials or fuels, such as:
Low-carbon (“green”) steel and other decarbonized inputs
E-fuels synthesized from renewable electricity
Sustainable biofuels
These are counted as emission credits that offset a portion of tailpipe emissions.
This isn’t just a tweak—it essentially scraps the outright ban on new ICE vehicles that was written into EU law in 2023 and enacted under Fit for 55.
Where This Came From: Industry and Member-State Pressure
The shift comes after months of lobbying by major automakers and pushback from some key EU member states (notably Germany and Italy the respective homes of those automakers) who argued that:
EV adoption isn’t scaling fast enough, especially in vans and commercial vehicles.
Charging infrastructure remains patchy in parts of the bloc.
China and the U.S. are dominating key battery and EV supply chains, risking European competitiveness if Europe moves too fast without flexibility.
Environmental groups have warned that softening targets now risks undermining investor confidence and slowing the transition.
So What Does This Mean Technically?
Before this proposal, the regulatory baseline looked like:
2030: ~55% reduction in fleet-wide CO₂ emissions for new cars compared to 2021.
2035: ~100% reduction (zero average tailpipe emissions).
Under the new proposal:
2035: ~90% reduction instead of 100%, with compensation mechanisms now built into the standard.
This could allow plug-in hybrids, mild hybrids, certain efficient combustion engines and even ICE vehicles to be registered if sufficient credits are earned.
Potential super-credit system for small, affordable EVs. This could help redirect investment toward a segment that has been largely underserved to date: the affordable electric market (so far completely dominated by Chinese brands).
Under the revised framework, new car CO₂ emissions could average ~11 g/km (instead of zero), and vans ~18 g/km, provided these are offset with credits for things like renewable fuels or green steel. One analysis suggests that emissions would rise by about 1 gigaton to 6.3 gigatons—an increase of more than 18% compared to the current regulation (which estimates total projected car CO₂ emissions of 5.3 gigatons between 2028–2050). This is equivalent to 1.4 times the annual greenhouse gas emissions of Germany.
I Don’t Love It, But I’m Not Entirely Against This
On the surface, this looks like a retreat from ambition, and critics are right to call it that. A hard 100% zero-emission target signals to markets, investors and the broader world that the transition is non-negotiable.
And I agree with that logic: mandates can work. In the U.S., regulatory pressure in the 1970s and 1980s helped dramatically improve fuel economy and emissions performance, even amidst industry outcry (see this delightful anecdote from 1973 about the time Honda rebuilt a V8 from GM to show them that better efficiency was possible without a drop in performance). History shows that clear, consistent policy can catalyze innovation and transformation.
But the world we’re in today is more complex:
EV adoption rates in Europe haven’t exploded as fast as regulators hoped, especially for commercial vans and niche segments.
Infrastructure deployment, supply chains, and consumer price sensitivity vary widely across EU member states.
The energy density of our best batteries still significantly lags gasoline which makes certain applications very difficult (e.g. long-haul trucking, airliners, etc).
Car emissions are not the only source of global emissions (roughly 11% of global total) and solving for these (e.g. green steel) can have significant knock-on effects.
So where I find myself agreeing with parts of this new approach is in its realism and its potential to expand impact. A 90% target doesn’t mean no EVs—it means mostly EVs, with room for innovation in clean fuels and materials alongside batteries. This acknowledges that the whole lifecycle matters, not just the last 10 feet between a tailpipe and the atmosphere. Also perhaps selfishly I want E-fuels to succeed as I want a future where I can drive an EV as a daily and still run a vintage Alfa without having to convert it to battery power.
But 10% Is Not Insignificant. That’s the Crux
If that 10% ends up being:
A loophole that lets automakers sell inefficient ICE variants, or
A structurally entrenched luxury segment with higher lifetime emissions per vehicle
Then we haven’t moved the needle enough.
The key question for me (and for anyone evaluating this honestly) is whether the compensation mechanisms are robust, transparent, and strictly enforced. If low-carbon steel or e-fuels are simply counted without real additionality or verification, then this proposal will amount to accounting smoke and mirrors (like much of the carbon credit system), not climate progress.
What I’ll Be Watching Closely
How “compensation” gets defined in legislative text, and whether credits have real climate integrity.
Parliament and Council amendments: will lawmakers strengthen or weaken the proposal?
Short-term interim targets: will the EU add binding milestones for the early 2030s to avoid backloading decarbonization?
Industrial strategy alignment: does this help European battery and EV leadership or just greenlight more reliance on imported solutions?
This debate isn’t going to end with a single vote. But it will shape where European automotive innovation goes, how quickly emissions drop, and how competitive the sector is globally.
Bottom Line
I don’t think we should let automakers dictate climate policy. Ambitious regulation has real power—and it often delivers more innovation than industry ever predicted it would.
But I also think climate policy should be grounded in reality, not a purity test that collapses under industrial and political pressure. It needs to target as much of the automotive lifecycle as possible.
So I see the logic in this revision: we need to push automakers, but we also need to be strategic. A residual combustion slice doesn’t have to be bad, as long as it’s small, accountable, and genuinely driving broader decarbonization in Europe’s automotive ecosystem.
Because the last thing we want is not “a bit of ICE,” but automotive paralysis.