The European Union has revised its post-2035 emissions framework, confirming that the internal combustion engine will not disappear entirely from the automotive market at the end of the next decade. While electrification remains the cornerstone of Europe’s mobility strategy, the European Commission’s review approved on 16 December introduces greater flexibility for carmakers and fleet operators alike.
Under the updated rules, the automotive industry will no longer be required to achieve a full 100% reduction in CO₂ emissions by 2035. Instead, manufacturers must meet a 90% cut, a change that effectively reopens the door to powertrains that are not fully electric or hydrogen-based. As a result, plug-in hybrids, vehicles equipped with range extenders, and models running on sustainable fuels will continue to have a place in the European market beyond 2035.
Combustion engines, but with a new role
The Commission’s decision does not signal a retreat from electrification. Battery-electric vehicles remain central to the EU’s long-term climate strategy, and the 2035 milestone is still firmly in place. However, the revised target acknowledges the technological and economic realities faced by the industry.
Low-impact steel, sustainable fuels such as biofuels and e-fuels, and other measures aimed at reducing lifecycle emissions will play a key role in enabling manufacturers to comply with the new threshold. In this context, the combustion engine is not being preserved in its traditional form, but rather redefined as part of a broader, more diversified decarbonisation strategy.
The message to the market is clear: electric mobility remains the priority, but carmakers will have additional pathways to reach CO₂ targets. This approach is intended to provide regulatory certainty while avoiding a one-size-fits-all solution that could disadvantage certain segments or regions.
What changes for corporate fleets
Corporate fleets are set to play a strategic role in the next phase of the transition. According to the Commission, fleets will be required to actively support the uptake of zero- and low-emission vehicles, with mandatory electrification quotas coming into force from 2030.
These targets will not be uniform across the EU. Instead, each Member State will define its own objectives based on the maturity of its local market, infrastructure readiness, and adoption rates. Governments will be responsible for reporting to the European Commission the total number of vehicles registered by large companies, clearly distinguishing between conventional models and those classified as zero or low emission.
Importantly, this data will have to be reported separately for passenger cars and light commercial vehicles, reflecting the different usage patterns and technological challenges of each category. For fleet operators, this means greater scrutiny but also clearer guidance on how their vehicle strategies align with national and European climate goals.
Support for the automotive industry
Alongside regulatory adjustments, the Commission has outlined a support package aimed at stabilising the automotive sector during the transition. The measures are expected to reduce investment burdens for manufacturers by an estimated €706 million per year, while also simplifying administrative and bureaucratic requirements.
This aspect is particularly significant for carmakers that, until now, have largely shouldered the cost and risk of electrification on their own. Many manufacturers invested heavily in electric platforms, powertrains, and software architectures without concrete financial backing from Brussels. The new framework is designed to improve investment predictability and restore confidence in long-term planning.
A more pragmatic transition
Overall, the revised 2035 framework reflects a more pragmatic approach to decarbonising road transport. The EU is reaffirming its commitment to climate neutrality while recognising that multiple technologies may be needed to reach that goal efficiently and sustainably.
For consumers, this means continued access to a broader range of vehicle technologies beyond 2035. For fleets and manufacturers, it offers additional flexibility in meeting emissions targets, without abandoning the overarching push toward electrification. The transition to cleaner mobility is still underway—but it will now follow a more nuanced and adaptable path.
