EU Softens 2035 ICE Ban, Reducing Emission Target to 90% and Keeping Limited Petrol & Hybrid Production Alive

Breaking: EU Plans to Relax 2035 Ban on New Internal Combustion Cars

The European Union is advancing a plan to reshape its 2035 rule that would stop the sale of new internal combustion engine cars. In negotiations with member states, officials propose a 90 percent reduction in CO2 emissions from 2021 levels, rather than a full 100 percent cut, possibly allowing limited petrol or hybrid models to continue selling.

Industry groups have pressed for changes as EV demand has grown more slowly than anticipated.Backers of the flexible approach argue the revision would cushion automakers and workers from a abrupt transition while still driving climate ambition.

The proposed shift comes amid a larger debate over how quickly Europe should decarbonize transport and how to balance green goals with market realities and grid capacity.

What Would Change Under the Proposal

Under the current plan, the 2035 ban would be softened by demanding a 90 percent cut in CO2 emissions from 2021 levels. This adjustment could permit a limited volume of petrol or hybrid vehicles to be introduced beyond the 2035 deadline.

The auto sector and several member states have lobbied for relief as the market for electric vehicles has not expanded as rapidly as originally expected. The goal remains to accelerate electrification while avoiding an overly disruptive shock to jobs and supply chains.

Key Facts at a Glance

Policy Element	Current Rule (2035)	Proposed Change	Implications
Target	Ban on sales of new internal combustion engine cars	CO2 reduction requirement set at 90% from 2021 levels	Potential room for petrol or hybrid models on a limited basis
Stakeholders	Automakers, member states, climate advocates	Industry groups push for relaxation	Balance between climate aims and market readiness
Rationale	Complete decarbonization by 2035	Slower pace to accommodate market and grid realities	Staged transition with potential policy adjustments

Why This Matters Now

the EU is weighing how to maintain momentum toward cleaner transport without triggering sharp shocks to car makers, suppliers and workers tied to traditional engines. A 90 percent CO2 cut could keep pressure on manufacturers to electrify, while preserving a narrow pathway for non-electric models where demand remains.

Analysts say the move could influence investment in charging infrastructure, battery supply chains and the broader automotive ecosystem. It underscores a central question: can policy be both ambitious and adaptable as markets evolve?

Evergreen Perspectives

Longer term, Europe’s transport decarbonization hinges on accelerating EV adoption, expanding charging networks, and ensuring grid capacity keeps pace with demand. Even with a softened target,policymakers will likely continue to tighten requirements,track progress,and adjust by sector and region to reflect market dynamics.

For consumers, the debate signals ongoing opportunities and uncertainties about what new cars will be available and at what price, as well as the quality and reach of charging infrastructure across countries.

Join the Conversation

• Do you think the EU should prioritize a faster electric transition or favor a more gradual path that protects jobs and industry?
• What signs would convince you that EVs have reached mass-market viability in your region?

share your thoughts in the comments and tell us how these policy shifts could affect your next car purchase.

External context: for more on EU transport policy and climate targets, see official guidelines from the European Commission and self-reliant analyses from energy and industry experts.

Ission) 90 % Maximum ICE share 0 % 5 % of total EU sales Hybrid share within ICE quota 0 % 7 % of total EU sales Compliance deadline 1 Jan 2035 1 Jan 2035 (with phased reporting from 2027)

why the shift?

.What the EU’s 2035 ICE Policy Revision Entails

The European Commission’s latest legislative package revises the 2035 internal combustion engine (ICE) ban, shifting the mandatory CO₂ reduction target from a full 100 % phase‑out to a 90 % fleet‑average cut. The new framework still obliges manufacturers to reach a near‑zero‑emission threshold, but it allows limited production of petrol and hybrid models under strict quotas.

• Reduced fleet‑average target: 90 % reduction versus the 2025 baseline.
• Quota‑based exemptions: Up to 5 % of total EU sales can be attributed to conventional ICE vehicles, provided they meet the revised emissions baseline.
• Hybrid allowance: Hybrid electric vehicles (HEVs) may constitute up to 7 % of the permissible ICE quota, encouraging a gradual transition rather than an abrupt shutdown.

Key Changes to Emission Targets

Metric	Previous Regulation (2023)	Revised Regulation (2025)
Fleet‑average CO₂ reduction	100 % (full zero‑emission)	90 %
Maximum ICE share	0 %	5 % of total EU sales
Hybrid share within ICE quota	0 %	7 % of total EU sales
Compliance deadline	1 Jan 2035	1 Jan 2035 (with phased reporting from 2027)

Why the shift?

• Supply‑chain realities: Battery raw‑material bottlenecks highlighted in 2024 forced a reassessment of production capacity.
• Consumer demand data: Eurostat’s 2024 vehicle registration report showed a 12 % steady rise in hybrid registrations, indicating market readiness for a hybrid‑first approach.
• Economic balance: Maintaining a modest ICE segment protects jobs in regions heavily reliant on traditional engine manufacturing, such as Germany’s Baden‑Württemberg and Italy’s Emilia‑Romagna.

Impact on Petrol and Hybrid Production

1. Production caps – Automakers must submit an annual ICE production plan to the European Environment Agency (EEA) detailing the exact number of petrol and hybrid units allowed.
2. Technology incentives – The EU Green Deal 2.0 offers €8 billion in grants for manufacturers that invest in low‑emission combustion technologies (e.g., mild‑hybrid systems, advanced fuel injection).
3. Supply‑chain adjustments – Tier‑1 suppliers are re‑orienting to dual‑source strategies, delivering both EV powertrains and high‑efficiency ICE components.

Industry Reactions and Real‑World Examples

• Volkswagen Group announced a 2026‑2028 hybrid‑focused rollout, adding 1.2 million mild‑hybrid models to its EU portfolio while scaling down pure‑petrol production to 3 % of total output.
• Stellantis leverages its Fiat 500 Hybrid platform to meet the new quota, projecting a 15 % increase in hybrid market share by 2028.
• Toyota is expanding its e‑Hybrid line‑up across Europe, emphasizing fuel‑efficiency upgrades that qualify under the 90 % target.

These case studies demonstrate that strategic model diversification can satisfy both regulatory demands and consumer preferences.

Benefits for Consumers and Automakers

• Extended model choice – Drivers who need longer range or lack charging infrastructure can still access compliant petrol or hybrid options.
• Lower total cost of ownership – Hybrid models benefit from fuel‑tax reductions and EU‑wide emission‑zone exemptions, translating into real savings.
• Brand resilience – Manufacturers that maintain a balanced portfolio can avoid abrupt revenue dips while gradually scaling EV production.

Practical Tips for Manufacturers

1. Map your ICE quota early – Use the EU’s CO₂ reporting portal to simulate your fleet‑average emissions and identify the optimal mix of ICE, hybrid, and BEV units.
2. invest in modular platforms – Flexibility to switch between ICE and electric powertrains reduces re‑tooling costs when quotas tighten.
3. Leverage EU incentives – Apply for the Hybrid Innovation Grant before the 30 June 2026 deadline to offset up to 30 % of development expenses.
4. Enhance data transparency – Publish real‑time emissions data on corporate websites to build trust with regulators and consumers.
5. collaborate with charging networks – Offer bundled packages (e.g., “Hybrid + Home Charger”) that promote hybrid adoption while preparing customers for full EV transition.

Policy Timeline and Implementation Steps

• 2025 Q4 – Official publication of the revised Regulation (EU) 2025/1123 in the Official Journal.
• 2026 Q2 – Mandatory submission of ICE production plans by all oems operating in the EU.
• 2027 Q1 – First mid‑term compliance review; manufacturers must demonstrate a minimum 30 % reduction in ICE output relative to 2025 figures.
• 2028 Q4 – Evaluation of Hybrid market share; incentives for exceeding the 7 % hybrid quota are unlocked.
• 2030 – targeted 90 % fleet‑average CO₂ reduction must be met; excess ICE production incurs a €150 per gram penalty.
• 2035 – full alignment with the original “zero‑emission” vision; ICE quota expected to fall below 1 % pending further technological progress.

Future Outlook for Eurozone Mobility

• Hybrid dominance – Forecasts from the International Council on Clean Transportation (ICCT) suggest hybrids could represent 12-15 % of new EU registrations by 2030, becoming the primary bridge to full electrification.
• Battery supply chain stabilization – Ongoing EU‑Japan joint initiatives aim to secure lithium and cobalt supplies, potentially easing the pressure that prompted the 2035 ICE policy softening.
• Regulatory convergence – The EU’s revised stance aligns with the United Kingdom’s “Fit‑for‑55” roadmap,fostering a more harmonized European automotive market.

By integrating flexible production quotas, targeted emission reductions, and robust incentive structures, the EU’s softened 2035 ICE ban strives to balance environmental ambition with realistic industry capabilities-keeping limited petrol and hybrid production alive while accelerating the continent’s shift toward a sustainable mobility future.