The EU Commission has proposed a shift away from the previously planned complete phase-out of combustion engine vehicles by 2035. According to the new plan, car manufacturers will only need to reduce CO2 emissions from new cars by 90 percent compared to 2021 levels, rather than the initial 100 percent target. This adjustment allows for the continued sale of certain hybrid vehicles with small combustion engines, provided the CO2 emissions are offset by using environmentally friendly steel and climate-friendly fuels.

The commission also recommends easing the 2030 interim emission targets by allowing manufacturers up to two additional years to compensate for exceeding limits before penalties are applied. Additionally, incentives for electric vehicles would be strengthened, including favoring a new category of small European e-cars in fleet emission calculations. These proposals respond to pressure from the automotive industry and several member states, especially Germany, with Chancellor Merz and Environment Minister Schneider expressing support. However, responses are mixed: the German Auto Industry Association criticized the plan as ineffective, while the Green Party called it a major economic and environmental mistake.