The three largest political groups in the European Parliament have converged on a rewrite of the EU’s new-car CO2 rules, and the rewrite keeps the internal combustion engine alive past 2035.
Negotiators for the centre-right EPP, the centre-left S&D and the centrist Renew reached agreement on 20 October on an amendment that resets the 2035 passenger-car target and introduces a low-carbon steel mechanism to offset part of the remaining emissions.
https://robotbelt.com/wp-content/uploads/2026/10/11_0-2.pngWhat the numbers now say
Under the agreed text, the 2035 CO2 reduction target for passenger cars is set at 87.5 per cent against 2021 levels, down from the 100 per cent cut written into the current regulation. The amendment also allows carmakers to offset up to 7.5 per cent of their emissions through the use of low-carbon steel produced inside the European Union.
If the text is adopted, petrol, diesel and hybrid cars would remain eligible for sale after 2035 as long as they meet the stated conditions. That is the substantive change. A 100 per cent target functioned as a sales ban. An 87.5 per cent target with a steel credit functions as a compliance regime.
How the number moved
The amendment sits at the end of a year of negotiation inside the bloc. The EU originally legislated a 100 per cent cut for 2035, which would have effectively prohibited new petrol, diesel and hybrid sales.
In December 2025 the European Commission proposed lowering the 2035 target from 100 per cent to 90 per cent, with the remaining tenth covered by low-carbon steel and alternative fuels. On 16 October, France and Germany agreed to a 90 per cent target and to dropping any additional offsetting requirement.
Parliament’s three groups have now gone further than either the Commission or the two largest member states, cutting the target to 87.5 per cent and reintroducing the offset explicitly.
Not a final decision
The agreement between the groups is not the EU’s final position on the file. The amendment still has to pass a full parliamentary vote and then be negotiated with member states before the final wording is fixed. Both stages have historically moved targets, in both directions.
For suppliers the practical question is timing. A 2035 endpoint shapes powertrain investment decisions taken in 2027 and 2028, which is where the difference between 87.5 and 100 per cent converts into capital allocation.
Editor’s note: This is an adapted translation of the original Gasgoo report. It has been trimmed and restructured for readability for an international business audience. The full original (in Chinese) is at https://auto.gasgoo.com/news/202610/29I70475654C108.shtml.