European Commission Softens ICE Ban: Allowing 90% Emission Cuts from 2035

The European Commission (EC) is preparing to formally introduce a significant revision to one of the European Union's flagship climate policies: the complete prohibition on selling new passenger cars and light commercial vehicles equipped with internal combustion engines (ICE) starting in 2035. This substantial shift in the bloc's transport strategy is slated for official presentation in Brussels on December 16, 2025.

Instead of mandating a 100 percent reduction in CO2 emissions for all new vehicles from 2035 onward, the EC is now proposing a more lenient benchmark: a 90 percent cut. This adjustment effectively removes the direct, technology-specific prohibition on fossil fuel-powered engines. It will permit the registration of a limited number of new ICE vehicles even after the previously established deadline. This initiative to ease the stringent timeline has garnered considerable political backing, notably from Manfred Weber, the leader of the European People's Party (EPP), who confirmed the reform, stating it takes the "technology ban" off the agenda.

This policy pivot follows intensive lobbying efforts from the European automotive sector, coupled with support from several influential member states. German Chancellor Friedrich Merz strongly advocated for this change, emphasizing that it would grant automakers the necessary "planning security" while allowing for the continued development of alternative power sources, such as synthetic fuels. While Eastern European nations also voiced support for a more flexible approach, countries like France, Spain, and the Scandinavian states had previously championed maintaining stricter emission reduction targets.

Industry figures suggest a slowdown in the pace of vehicle electrification. According to Patrick Schaufuss of McKinsey, maintaining economic viability during this transition period is "absolutely essential." Data from the first nine months of 2025 showed that battery electric vehicles (BEVs) accounted for 16.1 percent of new sales across the EU, rising to 16.4 percent by the end of October. Meanwhile, hybrid models maintained a substantial market presence, reaching 34.7 percent by the close of September 2025, with plug-in hybrids (PHEVs) capturing roughly 9 percent of the market share in the third quarter.

The European Automobile Manufacturers' Association (ACEA), represented by Director General Sigrid de Vries, welcomed the anticipated adjustments, describing them as a "critical stage for the sector's future." ACEA stressed that "other options must be available" for the transition to succeed smoothly. However, environmental advocacy groups have voiced serious apprehension, cautioning that plug-in hybrids, in real-world driving conditions, can generate pollutants comparable to conventional gasoline counterparts. This move toward a technology-neutral stance, supported by manufacturers like Porsche, reflects a broader ambition to safeguard the competitiveness of European manufacturing.

Furthermore, the EC intends to introduce supplementary measures aimed at boosting consumer demand for electric vehicles, particularly within corporate fleets. Discussions are underway regarding regulatory "loopholes," which could include exempting smaller European electric cars from certain stipulations and offering targeted financial incentives. These actions are designed to ensure a fair transition that respects national circumstances and preserves industrial added value within Europe, echoing the broader goal articulated by EC President Ursula von der Leyen concerning the 90 percent emission reduction target set for 2040.