With the automotive package presented on 16 December 2025, the European Commission wants to rewrite the CO₂ standards for new cars and vans and to steer company fleets towards clean vehicles. On 4 November 2026, the European Parliament’s committees adopted their positions on both. Plenary votes follow in December; Member States are still divided. The outcome matters well beyond carmakers: for suppliers, steelmakers, fuel producers, leasing companies and every large company that runs a fleet.
In short
- 2035 is no longer 100%. The Commission proposes a 90% cut in the average CO₂ emissions of new cars and vans by 2035, with the remaining 10% compensated through credits for EU-made low-carbon steel and renewable fuels. Parliament’s environment committee wants a 95% cut, of which up to 7.5 percentage points may come from credits for EU-made low-carbon steel, so at least 87.5% at the tailpipe.
- ‘Made in the EU’ enters the CO₂ rules. Super-credits would reward small and efficient electric cars built in the EU, and steel credits would count only for EU-made low-carbon steel.
- National targets for company fleets. From 2030, Member States would have to raise the share of zero- and low-emission vehicles among new cars and vans registered by large companies. Parliament wants these targets to be ‘aspirational’; many Member States have reservations about binding targets.
- Public support tied to clean, EU-made vehicles. Both the Commission and Parliament would reserve public support for company cars and vans for zero- and low-emission vehicles made in the EU; in the Commission’s proposal, from 2028.
- Council still split. Options range from keeping the 100% target to a 90% cut without compensation, as France and Germany now propose. The Irish Presidency aims for a Council position in December; Parliament is expected to vote on its mandate at the 14–17 December plenary.
What the Commission proposed
Under current law, Regulation (EU) 2019/631 as amended by Regulation (EU) 2023/851, carmakers must cut the average CO₂ emissions of their new cars by 55% and of their new vans by 50% in 2030, and of both by 100% in 2035, compared with 2021 (Article 1(5) and (5a)).
The proposal of 16 December 2025 (COM(2025) 995, procedure 2025/0420(COD)) changes this in four ways:
- A 2035 target of 90% for cars and vans. The remaining 10% must be compensated: up to 7 percentage points with credits for low-carbon steel made in the EU, and up to 3 points with credits for sustainable renewable fuels such as e-fuels and biofuels.
- A lower 2030 target for vans: 40% instead of 50%.
- Multi-year compliance for 2030–2032, as Regulation (EU) 2025/1214 already allows for 2025–2027.
- Super-credits until 2034: a small electric car made in the EU would count as 1.3 vehicles in a manufacturer’s fleet average.
Companion proposals cover clean corporate vehicles (COM(2025) 994) and an ‘automotive omnibus’ of simplification measures (procedure 2025/0422(COD)).
What Parliament’s committees changed
The environment committee (ENVI) adopted its report on 4 November by 48 votes to 30, with 2 abstentions, endorsing a compromise between the EPP, S&D and Renew Europe that the industry and transport committees had backed on 22 October. The vote fixes the committee’s position only; the full Parliament decides on its mandate in December.
| Current law | Commission proposal | ENVI position (4 November 2026) | |
|---|---|---|---|
| Cars, 2035 | 100% | 90%; remaining 10% compensated (steel up to 7 points, fuels up to 3) | 95%, of which up to 7.5 points through EU low-carbon steel credits (at least 87.5% at the tailpipe) |
| Vans, 2030 | 50% | 40% | 35% |
| Vans, 2035 | 100% | 90%; compensated as for cars | 80%; steel credits capped at 7.5 points, as for cars |
| Steel credits before 2035 | none | none | Up to 3% of the target, from entry into force until the end of 2034 |
| Renewable fuels | none | Credits of up to 3 points | Vehicles running only on eligible renewable or low-carbon fuels count as zero-emission |
| Super-credits (EU-made) | none | Small electric cars: 1.3 until 2034 | Small electric cars (up to 4.2 m): 1.4; highly efficient electric cars: 1.2; plus 0.1 under social leasing; electric vans: 1.2, rising to 1.4 from 2035 |
For cars, the fleet target is thus 95%, and manufacturers may meet up to 7.5 points of it with credits for certified EU low-carbon steel. The 87.5% is a floor, not a free discount: a manufacturer with too few steel credits has to bring tailpipe emissions closer to 95% to avoid excess emissions premiums. Unlike the Commission’s proposal, the last 5 points up to 100% need not be compensated. Rapporteur Massimiliano Salini (EPP, Italy) called the agreement ‘a turning point for the European automotive industry’. The European carmakers’ association ACEA welcomed the direction but considers the flexibility for cars ‘too limited in scope and duration’.
In a parallel vote on the automotive omnibus (105–39–21), three committees backed the definitions of ‘small’ and ‘highly efficient’ electric cars behind the super-credits, and voted to keep the current CO₂ calculation method for EU-made plug-in hybrids until the end of 2029.
Company fleets: national targets and conditions on public support
Businesses buy 58% of new cars and 90% of new vans in the EU, according to Parliament. The Commission’s proposal places the obligations on Member States, not on companies:
- Targets from 2030. Each Member State must ensure a minimum share of zero- and low-emission vehicles, with a zero-emission sub-target, among new cars and vans registered by large undertakings (Article 3). National targets in the Annex vary mainly with GDP per capita: for cars in 2030, from 48% to 90%.
- Conditions on support from 2028. Member States could no longer give financial support for the purchase, lease, rent or operation of corporate cars and vans other than zero- and low-emission vehicles, and could support those only if ‘made in the European Union’ (Article 4), a criterion the Commission would set by delegated act.
The environment and transport committees (89–29–4) turn these into ‘aspirational’ targets for 2030 and 2035, ranging from 67% to 95%, with national plans from 2028. They cover companies with more than 250 employees and a turnover above €50 million. Support would go only to vehicles ‘made in the European Union’, as defined under the Industrial Accelerator Act — ‘from 2028’, according to co-rapporteur François Kalfon (S&D, France) — while the ban on supporting vehicles that are not zero- or low-emission would apply from 2032 rather than 2028.
In the Council, nine Member States proposed in May an ‘enabling framework’ of guidelines and incentives instead of a regulation. The Irish Presidency has suggested making the 2030 targets indicative and the 2035 targets binding. On public support, the Council Legal Service has informally advised that Article 4 does not affect Member States’ fiscal sovereignty.
Where the file stands (12 November 2026)
- European Parliament. The three committee positions are expected to go to the plenary of 14–17 December 2026 as Parliament’s negotiating mandates.
- Council. A progress report of June 2026 showed openness to multi-year compliance and steel credits (some delegations want to add aluminium), but deep splits on the 2035 target, fuel credits and ‘made in the EU’. In June, seven Member States, France among them, warned against further weakening. In October, France and Germany agreed on a 90% cut by 2035 without compensation, as part of a broader deal on ‘Made in Europe’ rules for cars.
- Coreper on 11 November. The Irish Presidency has linked the CO₂ talks to the automotive provisions of the Industrial Accelerator Act and put the main choices to EU ambassadors, according to Agence Europe: the 2035 target and its compensation, the calculation method for plug-in hybrids until 2030, the status of vehicles running only on eligible fuels, and whether ‘Made in Europe’ should extend beyond the EU and the EEA.
- Timing. The Presidency aims for a Council position in December; the Environment Council meets on 11 December. Trilogues can then start in 2027. Until the amending regulation is adopted, the 2030 targets of current law (55% for cars, 50% for vans) remain in place.
What it means in Belgium
- High fleet targets. Because the targets follow GDP per capita, Belgium sits at the top of the range in the Commission’s proposal: from 2030, 90% of new corporate cars registered by large companies would have to be zero- or low-emission, including at least 58% zero-emission; for vans, 52% and 47%. Parliament and the Council may soften their legal force, not necessarily the direction.
- Company-car taxation meets ‘made in the EU’. Federal tax rules already point the same way: under the 2021 law on the fiscal and social greening of mobility, as amended in December 2025, companies can no longer deduct the costs of cars with a combustion engine, plug-in hybrids included, bought, leased or rented from 1 January 2026. Zero-emission cars remain fully deductible until the end of 2026 and at a declining rate after that (95% in 2027). The softer regime for plug-in hybrids adopted in December 2025 applies only in personal income tax, not to companies. The open question for employers, leasing companies and importers is whether a tax deduction counts as ‘financial support’ under Article 4, a term the proposal does not define. If so, the ‘made in the EU’ condition could reach the tax treatment of zero-emission company cars built outside the EU. The informal reading of the Council Legal Service points the other way; the final wording will decide.
- Steel. Steel credits create demand for EU-made low-carbon steel, defined by a delegated act under the Ecodesign Regulation. Adoption is planned for the fourth quarter of 2026 (no draft published yet); after scrutiny by Parliament and Council, the definition is not expected to be final before the first half of 2027. That definition matters directly to steel producers and processors in Belgium.
What to do now
- Model three scenarios. Carmakers, importers and suppliers should test their 2030–2035 plans against the Commission’s 90% with compensation, Parliament’s 95% with up to 7.5 points from steel credits, and the Franco-German 90% without compensation.
- Map your ‘made in the EU’ exposure. Super-credits, steel credits and support for company vehicles all depend on EU production; the criteria will come from the Industrial Accelerator Act and delegated acts.
- Prepare the evidence for credits. Steelmakers should follow the ecodesign act that defines low-carbon steel; aluminium producers the Council debate on extending credits; fuel producers the discussion on which fuels under the Renewable Energy Directive qualify.
- Review fleet policies. Large companies and leasing firms should compare their new registrations with the proposed 2030 levels and, in Belgium, follow how Article 4 interacts with federal company-car taxation.
- Engage before December. The Council position and the plenary vote set the starting points for trilogues in 2027. In Belgium, where the Council position is agreed between the federal government and the regions, that means both levels.
Sources
- European Commission, Taking action for a clean and competitive automotive sector, 16 December 2025.
- European Parliament, Legislative Observatory, procedure 2025/0420(COD) and summary of the Commission proposal COM(2025) 995.
- European Commission, Proposal for a regulation on clean corporate vehicles, COM(2025) 994, 16 December 2025 (Articles 3 and 4 and Annex).
- European Parliament, CO2 emissions: adjusted targets, more incentives for clean vehicles, press release, 4 November 2026.
- European Parliament, Corporate fleets: accelerating the uptake of zero- and low-emission vehicles, press release, 4 November 2026.
- European Parliament, Automotive sector: boost electric vehicles, simplify measures, press release, 4 November 2026.
- Regulation (EU) 2023/851, 19 April 2023, and Regulation (EU) 2025/1214, 17 June 2025, amending Regulation (EU) 2019/631, EUR-Lex.
- Council of the EU, Progress report on the CO₂ standards for cars and vans, ST 10065/26, 12 June 2026.
- Council of the EU, Presidency steering paper on clean corporate vehicles, ST 13746/26, 30 September 2026.
- Council of the EU, Environment Council, 11 December 2026.
- Agence Europe, IAA and ‘automotive package’: EU27 ambassadors to decide on several issues, including Franco-German proposals, 9 November 2026 (paywall).
- electrive, EU Auto Package: Committee votes to relax CO₂ rules, 23 October 2026 (reporting Der Spiegel and Handelsblatt), and EU Parliament: Environment Committee votes to relax CO2 rules, 5 November 2026.
- ACEA, ENVI vote marks another step towards a more pragmatic CO2 framework for cars and vans, 4 November 2026.
- Euronews, Seven EU countries push Brussels to resist further weakening of car emission targets, 8 June 2026.
- Akin Gump, Steering toward 2035: EU’s automotive sector gets a package, 19 December 2025.
- ITAA, Autofiscaliteit in de vennootschapsbelasting anno 2026: korte stand van zaken, 1 April 2026.
- Vandelanotte, Gewijzigde autofiscaliteit: overzicht aftrekbaarheid anno 2026 (Law of 18 December 2025 laying down various provisions).
- European Commission, Have your say: Ecodesign requirements for iron and steel products, initiative 17672 (planned adoption: fourth quarter of 2026; draft act not yet published), consulted 12 November 2026.
- European Parliament, Legislative Train: Industrial Accelerator Act, updated 25 October 2026.
This analysis reflects the state of the file on 12 November 2026. We update it when the file moves.