CO2 emissions: adjusted targets, more incentives for clean vehicles

Follow-up to the 2025 strategic dialogue on the future of the automotive industry

Revised CO2 emissions reduction targets for new cars and vans

Incentives for manufacturers: low-carbon steel made in the EU and super credits for certain electric vehicles (EVs)

On Wednesday, Parliament’s Environment Committee adopted its proposal for revised CO2 emissions targets for new cars and vans and incentives for clean vehicles made in the EU.

Adopted with 48 votes in favour, 30 against and two abstentions, the draft rules are part of a broader package for a clean and competitive European automotive sector.

Adjusted targets and low-carbon steel credits

For passenger cars, MEPs want to lower the 2035 fleet-wide CO2 emissions reduction target from 100% to 87.5%. Manufacturers would have to compensate for emissions capped at 7.5% (of the 2021 EU fleet-wide reference target) to reach a target of 95%, by using credits for low-carbon steel made in the EU.

For vans, MEPs propose a 35% reduction target by 2030, compared with 40% in the Commission text and 50% under the existing rules. The 2035 target would decrease from 100% to 80% (in this case, low-carbon steel credits could be used, subject to a 7.5% cap).

From the entry into force of the rules and until the end of 2034, low-carbon steel credits may count for no more than 3% towards meeting specific targets for both cars and vans.

To clarify the application of the new rules, MEPs propose that “vehicles running exclusively on eligible fuels” (VEEFs) would mean cars and vans using only renewable and low-carbon fuels that meet certain criteria. The definition of “zero-emission vehicles” would also be modified to include both vehicles with zero CO2 tailpipe emissions and VEEFs.

Super credits for certain EVs

In calculating a manufacturer’s average specific CO2 emissions, small EVs (having a maximum length of 4.2 metres and made in the EU) would count as 1.4 vehicles, and highly efficient EVs (made in the EU and meeting strict electric energy consumption thresholds) as 1.2 vehicles, MEPs say. If vehicles are registered under a social leasing scheme, the multipliers would be increased by 0.1, to 1.5 and 1.3 respectively. Pure electric vans made in the EU would count as 1.2 vehicles from the entry into force until the end of 2034 and as 1.4 vehicles as of 2035.

Quote

Rapporteur Massimiliano Salini (EPP, IT) 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. Low-carbon steel made in Europe could be used immediately, rewarding European production and strengthening the Union's strategic autonomy".

Next steps

Parliament’s mandate for negotiations with EU governments is expected to be voted during the December 2026 plenary session.

Background

In December 2025, the Commission presented a proposal for a regulation on CO2 emission performance standards for new light duty vehicles and vehicle labelling, following a strategic dialogue that convened key European automotive industry leaders, social partners, and stakeholders. The proposal reviews the existing rules for new cars and vans and addresses current challenges facing the automotive sector.