EU Environment Committee Votes 48-30 to Cut 2035 Car CO2 Target

The European Parliament's Environment Committee voted 48-30 on Tuesday to ease CO2 emissions reduction requirements for new cars and vans, pushing for an 87.5% reduction target for cars by 2035 — lower than both the European Commission's proposed 90% and the 100% requirement written into current law.

The vote sharpens a regulatory retreat that began in December 2025, when the Commission released its "Automotive Package" proposing to soften the 2035 rules that would have effectively ended sales of new internal combustion cars and vans in the EU. Parliament is expected to vote on its negotiating position with EU governments in December.

What does the change mean for the material stream?

The current 100% CO2 reduction mandate dates from 2023, when EU lawmakers adopted a suite of clean mobility rules under the Commission's "Fit for 55" strategy, which targets a 55% cut in greenhouse gas emissions by 2030 against 1990 levels. Automakers have spent the past several years warning that slower-than-expected EV uptake, combined with the Trump administration's policy shift away from supporting electric vehicles in the U.S., made the targets unrealistic.

The Commission's December 2025 package proposed a 90% tailpipe emissions reduction target by 2035, with carmakers compensating for the remaining emissions through EU-made low-carbon steel, e-fuels and biofuels. The Commission said the revised target would allow hybrids, plug-in hybrids, range extenders and internal combustion vehicles to remain in play alongside full EVs and hydrogen vehicles.

The ENVI committee went further in three respects:

• Cars: a 87.5% reduction target by 2035, with low-carbon steel credit compensation capped at 7.5% of remaining emissions.
• Vans: a 35% reduction target by 2030, down from 40% in the Commission text and 50% under existing rules; the 2035 target drops from 100% to 80%, with the same 7.5% cap on EU low-carbon steel credits.
• Definitions: "zero-emission vehicles" would now include vehicles with zero tailpipe CO2 as well as "vehicles running exclusively on eligible fuels" (VEEFs) — those using only renewable and low-carbon fuels meeting certain criteria.

The expanded ZEV definition has direct consequences for the low-carbon fuels market: vehicles powered exclusively by renewable fuels compliant with the renewable energy directive would count as zero-emission, similar to electric vehicles.

Rapporteur Massimiliano Salini said: "Our agreement marks a turning point for the European automotive industry. Registering combustion engine cars without compensation obligations would remain possible, protecting technological freedom and restoring prospects for the entire supply chain. Decarbonisation does not mean imposing one technology — we also recognise as zero-emission vehicles powered exclusively by renewable fuels that comply with the renewable energy directive, similar to electric ones."

What happens next?

The committee position now goes to the full Parliament, which votes in December on its mandate for negotiations with EU governments in trilogue. The final number — whether 87.5%, 90% or something between — will set the compliance math for every carmaker selling in the bloc, and with it the demand pull for EU-made low-carbon steel credits and renewable fuels through 2035.

For steel recyclers and low-carbon fuel producers, the 7.5% cap on steel credit compensation is the figure to watch: it bounds how much residual combustion-emission liability can be offset through domestically produced green steel rather than eliminated at the tailpipe.