European Commission Considers Limited Combustion Car Sales Beyond 2035

The European Commission is considering a package of measures that would soften the effective ban on sales of new pure combustion passenger cars from 2035, senior Commission, government and industry sources say. Under the most developed option, certain vehicle types would be allowed on the market until 2040, conditional on tight compensation rules for any extra tailpipe emissions.

The draft approach focuses on two classes of powertrain. The first is plug in hybrid vehicles, which combine an electric battery and an internal combustion engine. The second is battery electric vehicles fitted with a small combustion range extender intended to provide auxiliary range. Officials are reportedly inclined to treat range extender architectures more favourably than conventional plug in hybrids because they are projected to emit less carbon dioxide in real world use.

A central technical change under discussion would relax the current zero tailpipe emissions standard for 2035 era rules to a 90 percent emissions reduction requirement. That shift would permit limited residual tailpipe emissions from approved powertrains so long as automakers offset the remainder through pre approved mechanisms.

Possible offsets cited by sources include the introduction of advanced biofuels made from residues and wastes, the wider use of synthetic efuels produced from captured carbon dioxide and renewable electricity, and measures to lower the carbon intensity of vehicle manufacture, notably increased use of green steel. The package would also create crediting and pooling mechanisms so manufacturers could buy and sell compliance credits across brands. Under the contemplated methodology, range extender models would receive more compliance credits than conventional plug in hybrids.

Officials are also preparing parallel measures targeting demand and taxation. Proposals include incentives to accelerate electric car uptake in corporate fleets, which account for about 60 percent of new car purchases in Europe, and the creation of a new regulatory category for small electric vehicles with reduced taxes and additional compliance crediting. Insiders say the Commission prefers subsidy based incentives to strict mandates in order to move fleets and supply chains without abrupt regulatory shocks.

Political pressure underpinning the discussions is clear. Major automotive countries have argued the transition timeline threatens competitiveness and jobs, pointing to strong industrial ties across engine manufacturing, supplier networks and regions with deep cultural attachment to car production. Brussels has already granted the sector temporary relief earlier in the decade when compliance schedules were extended for certain targets.

The proposal remains under negotiation and several decisive elements are unresolved. The Commission has not finalised the legal form of any derogation or new category, the detailed formulae for crediting and market trading, or the precise timetable for implementation. A package is expected to be presented imminently at EU transport minister meetings, where national capitals will press their own technical and political preferences.

If adopted, the plan would create a complex compliance architecture that aims to reconcile climate obligations with industrial realities. Its passage will test the European Union capacity to uphold its international climate commitments while managing deep domestic economic and cultural sensitivities in the automotive heartlands.