European Union lawmakers reached a political agreement in October 2026 to effectively scrap the 100% electric vehicle mandate originally set for 2035, opening the door for new combustion-engine and alternative-fuel vehicles to remain on the market.
Negotiators from the European Parliament’s three largest political groups—the European People’s Party, the Socialists and Democrats, and Renew Europe—agreed to adjust carbon dioxide emissions standards for new vehicles, according to reporting by Reuters. The shift modifies the "Fit for 55" dossier approved by the European Council on March 28, 2023, which previously dictated a complete phase-out of new petrol and diesel car sales by the start of 2035.
Reassessing the 2035 Combustion Engine Ban
Under the newly agreed terms, the overall CO2 emissions reduction target for new passenger cars in 2035 drops from 100% to 87.5% compared to 2021 levels. An additional 7.5% reduction can be offset if vehicles are manufactured using low-emission steel produced within the European Union, as reported by Milano Finanza.
The remaining 5% of emissions flexibility would be granted without mandatory offsets, leaving manufacturers with a total allowable residual emissions quota of 12.5%, according to Europa Today. This structural change means traditional internal combustion engines do not face an outright ban across the bloc.
Timeline of Policy Shifts and Interim Targets
The European automotive debate has evolved through several distinct regulatory proposals over recent years:
- March 28, 2023: The European Council formally approves the "Fit for 55" package, locking in a 100% reduction target for new car emissions by 2035.
- 2025: The European Commission proposes softening the 2035 target to a 90% reduction, allowing the final 10% to be offset by low-emission steel and alternative fuels.
- October 2026: Negotiators from the European People’s Party, Socialists and Democrats, and Renew Europe agree to lower the baseline target to 87.5% with steel credits, creating a path for combustion engines to persist.
- Spring 2027: The formal target window when the European Parliament and member state governments are scheduled to vote on common legislative text reflecting the compromise.
Compliance Mechanics for Manufacturers
The legislative framework introduces specific allowances for alternative propulsion methods and manufacturing origins. From 2030, automakers can register vehicles outside standard emissions limits if they run exclusively on eligible fuels, such as advanced biofuels and synthetic e-fuels.
Automoto.it reported that the compliance calculations factor in the geographic origin of vehicle assembly. To qualify for specific regulatory preferences, vehicles must be assembled in the 27 EU member states or broader European market partners including the United Kingdom, Norway, Switzerland, and Island, excluding production hubs in Morocco and Turkey. Vehicle batteries remain excluded from the European value calculation, reflecting current supply chain dependencies on Chinese manufacturing capacity.
For light commercial vehicles, the agreement outlines a separate trajectory requiring a 35% emissions reduction by 2030 and an 80% reduction by 2035, adjusting metrics for commercial van producers like Stellantis.
Can Motorists Still Drive Petrol and Diesel Cars?
Can motorists still drive petrol and diesel cars purchased before 2035?
European regulations do not require the scrapping or removal of existing petrol and diesel vehicles already owned by motorists when the 2035 milestone arrives, as reported by Europa Today. The policy restricts the sale of newly registered vehicles rather than banning cars currently in circulation.
What are VEEF vehicles and how do they function?
The agreement establishes a category known as VEEF—Vehicles running Exclusively on Eligible Fuels—starting in 2030. These cars can continue running on liquid fuels, provided the fuels meet strict greenhouse gas reduction thresholds and transition from general renewable standards to advanced biofuels and synthetic e-fuels by 2033.
Is the 2026 agreement final law?
The current terms represent a political consensus among parliamentary negotiators that requires formal approval by the political groups, followed by legislative negotiations and a definitive vote projected for the spring of 2027, according to Milano Finanza.
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