Commodities February 2, 2026

EU Adjustment to 2035 CO2 Rule Could Still Leave Significant Place for Non-EV Cars, Campaign Group Says

Transport advocacy group T&E warns the commission's shift from a full zero-emission mandate to a steep emissions cut may permit continued sales of higher-emitting vehicles after 2035

By Marcus Reed
EU Adjustment to 2035 CO2 Rule Could Still Leave Significant Place for Non-EV Cars, Campaign Group Says

A change in the European Commission's proposed regulation for new vehicles in 2035 - replacing a zero-emissions requirement with a 90% CO2 cut from 2021 levels - is likely to result in a large share of battery electric vehicle (BEV) sales but may also allow substantial continued sales of internal combustion and plug-in hybrid models, according to transport campaign group Transport & Environment (T&E). T&E estimates a most likely non-BEV share of 15% after 2035 and cautions the relaxation could raise car CO2 emissions by 10% between 2025 and 2050 compared with current rules.

Key Points

  • Under the European Commission's December proposal to cut CO2 by 90% in 2035 from 2021 levels, battery electric vehicles are likely to represent about 85% of new car sales in the EU from 2035, according to T&E.
  • T&E's analysis sets a potential non-BEV sales range of 5% to 50% after 2035 depending on manufacturers' strategies, and identifies 15% as the most likely share reflecting mixed sales of combustion-engine and plug-in hybrid models.
  • The commission says the revised target would save vehicle makers 2.1 billion euros over three years and support EV sales, while T&E warns the change could raise car CO2 emissions by 10% between 2025 and 2050 versus current stricter rules - impacting the automotive sector, EV supply chains, and emissions-focused policy markets.

The European Commission's December proposal to replace a full ban on new combustion-engine vehicles with a target to cut CO2 emissions by 90% in 2035 from 2021 levels is projected to still favour battery electric vehicles substantially, but campaigners say it leaves room for continued sales of higher-emitting cars.

Transport & Environment (T&E), a clean transport advocacy group, assessed the commission's change and concluded that under the new approach electric cars are likely to account for about 85% of new vehicle sales in the EU from 2035. The group added that, depending on carmaker strategies, the share of BEVs could fall to as low as 50%.

T&E criticised the commission's move as the EU's largest retreat from its climate policies in years, arguing the proposal will permit ongoing sales of vehicles with relatively high CO2 emissions. The group also highlighted competitive dynamics, noting Chinese manufacturers are advancing further in battery electric vehicles.

In defending its proposal last December, the European Commission said the revised target would continue to support EV sales across the EU while reducing costs for vehicle makers. The commission estimated the change would save manufacturers 2.1 billion euros over three years, freeing funds for innovation and the development of new electric models. ($1 = 0.8474 euros)

In a report published on Tuesday, T&E provided a range for how many non-BEVs carmakers could sell after 2035: from as little as 5% up to 50%. The lower bound corresponds to a manufacturer continuing to market high-emissions internal combustion engine models, and the upper bound assumes a maker focuses on the most efficient extended-range plug-in hybrids.

According to the report, T&E considers a 15% share of non-BEV sales the most likely outcome, representing a mix of some combustion-engine vehicles and some plug-in hybrid models continuing in the market. The organisation also warned that combining the relaxed 2035 target with an extended compliance timeframe for 2030 rules would raise cumulative car CO2 emissions by 10% between 2025 and 2050 compared with the current, stricter framework.

T&E further noted a procedural risk: the proposal must still be approved by both the European Parliament and the Council of EU governments, and there is a possibility of additional weakening of the rules during those debates.


Context limitations - The report and commission statements above reflect the positions and estimates contained in T&E's analysis and the European Commission's announcement; further details will depend on the legislative process in the European Parliament and the Council.

Risks

  • Further weakening of the proposed rules during debate in the European Parliament and the Council could allow more high-emission vehicles to be sold after 2035 - affecting vehicle manufacturers and emissions reduction targets.
  • A relaxation of the 2035 target combined with extended compliance timelines for 2030 could lead to higher overall car CO2 emissions through 2050, which has implications for environmental policy goals and firms exposed to emissions-related regulation.
  • Allowing continued sales of more efficient plug-in hybrids or high-emission internal combustion vehicles could slow absolute BEV uptake, influencing demand for battery supply chains, EV manufacturing investment, and market shares across automakers.

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