European lawmakers have reached a compromise to adjust the 2035 emissions reduction targets for new vehicles. The agreement proposes an 87.5 percent reduction in average CO2 emissions compared to 2021 levels, replacing the previous 90 percent target proposed by the European Commission in December 2025.
The new framework allows manufacturers to utilize credits for low-carbon steel produced within the EU to offset a portion of their emissions obligations. These credits can account for up to 7.5 percentage points of the reduction requirement, providing automakers with more flexibility in their fleet compositions.
The proposal also sets a 55 percent reduction target for average car emissions by 2030, while the target for vans is adjusted to 35 percent. The agreement introduces additional flexibility through multi-year compliance arrangements and credits for specific efficient or smaller electric vehicles.
This legislative step does not grant unrestricted permission to sell combustion-engine vehicles indefinitely. Automakers must still balance their fleet averages, and the final number and types of vehicles permitted for sale will depend on the definitive regulations and credit rules yet to be finalized.
The agreement is not yet law. It must be formalized by the participating parliamentary groups and subsequently negotiated between the European Parliament and EU member states. Until the process concludes, the original 2023 legislation remains the legal baseline.
