The European Commission drew up plans to introduce more flexibility into a regulation that aims to lead to a complete phase out of new fossil fuel-powered passenger vehicles by 2035. The move would allow carmakers to continue to produce petrol or diesel vehicles beyond 2035 using various mechanisms for complying with the regulation.
Experts at watchdog group Transport & Environment (T&E) have raised concerns about the plan, which they say risks weakening the EU’s 2035 zero-emission target. T&E said it believed that the Commission had succumbed to pressure from carmakers after electric vehicle (EV) sales stagnated in 2024.
The group continued by saying that carmakers “only need to meet targets at five-year intervals” and had maximised combustion engine sales ahead of the 2025 compliance year, before shifting focus back to EVs in 2025.
EV sales rebound
Sales of EVs in 2025 rose by 25 per cent following the launch of more affordable models like the Renault 5. However, industry had by then managed to garner political support for an early review of the CO₂ regulation.
T&E says the latest proposals will lead to a delay in the uptake of battery electric vehicles and an increase in emissions to approximately 720m tonnes of CO₂ over a 25-year period, 10 per cent more than current levels. The EU’s ability to meet its 2050 net zero objective will be undermined if the proposal is introduced in its current form, the organisation says.
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Fuel credits spark controversy
Amongst the most contentious elements is a fuel crediting mechanism in the proposal that will give carmakers CO₂ credits based on the volume of biofuels and e-fuels introduced into the road fuel market. According to T&E, the scheme could significantly weaken the target for phasing out fossil fuel-powered vehicles and hinder the move towards zero emission alternatives.
The averaging mechanism for 2030 targets would also likely delay battery electric vehicle uptake “at the most crucial moment of the transition”, according to T&E. The mechanism allows manufacturers to spread their CO₂ reduction efforts over a number of years rather than produce a significant decline year on year.
Nerves of steel
The group also noted that the Commission wants to introduce credits for the use of low-carbon steel in vehicle production, adding that the allowance would only be effective if confined to steel produced using fossil fuel-free “green steel” production methods.
Credits for the use of “Made in EU” supercredits for smaller battery electric vehicles helps sales figures but encourages fewer EVs overall. Supercredits reflect more than one unit towards meeting sales figures for EVs.
Competitiveness and industrial strategy
T&E said introducing more flexibility into regulations determining numbers of BEVs required for 2030 and 2035 targets will weaken Europe’s drive towards sustainability and reduce competitiveness. Lowering figures for BEVs will lead to delays in producing mass market electric models. This would come at the worst possible time, its campaigners portend.
Industry representatives want fewer constraints on producing carbon emissions and have called for a further extension of the averaging mechanism from three years to a longer period.
What started as an Environment Committee review into passenger car CO₂ emission regulations is due for consideration by both the European Parliament and Council.
