Reduction in CO₂ emissions of new passenger cars and of new light commercial vehicles

KEY POINTS

• The regulation sets out carbon dioxide (CO₂) emissions performance requirements for new passenger cars and for new light commercial vehicles (i.e. vans).
• The EU’s CO₂-emission-reduction targets for new cars and vans are aligned with the EU’s revised climate objectives, set out in the EU Climate Law (Regulation (EU) 2021/1119), which enshrines the objective to reach climate neutrality by 2050 in legislation and also establishes a domestic reduction target in the EU for net greenhouse gas emissions of at least 55% by 2030, compared to 1990 levels.
• These requirements will also contribute to achieving the target of reducing, by 2030, greenhouse gas emissions in the sectors not covered by the emissions trading system by 40% compared to 2005.

Emission-reduction targets

• Compared to 2021, the regulation requires that the annual EU fleet-wide average CO₂ emissions from new cars and new vans be reduced:
  • by 15% for the 2025–2029 period;
  • by 55% for new cars and 50% for new vans for the 2030–2034 period;
  • by 100% from 1 January 2035 onwards.
• Each year, the European Commission, in an implementing act, establishes the average CO₂ emissions and the specific CO₂ emissions target for each manufacturer in order to evaluate their performance in complying with their targets (for 2022, see Implementing Decision (EU) 2024/865).
• Manufacturers exceeding their specific emissions target will have to pay an excess-emission premium of €95 per g/km for each new vehicle registered.

Incentives for the uptake of zero- and low-emission vehicles

• From 1 January 2025 to 31 December 2029, a zero- and low-emission vehicle (ZLEV) incentive applies, whereby the specific CO₂ emission target for a manufacturer is relaxed if its share of ZLEVs (vehicles with emissions from 0 up to 50 g/km) registered in a given year exceeds the following benchmark levels: 25% for cars and 17% for vans.
• For calculating the ZLEV share in a manufacturer’s fleet, an accounting rule applies that gives a greater weight to ZLEVs with lower CO₂ emissions.

Pooling, derogations and eco-innovations

• These are measures that make it easier for manufacturers to meet their targets.
• Manufacturers may form a pool, in which case a joint target applies to the entire pool.
• Manufacturers registering annually fewer than 1,000 new cars or vans are exempt from meeting specific emissions targets, unless they have applied for a derogation.
• Manufacturers registering fewer than 10,000 cars or 22,000 vans may apply for a ‘small-volume manufacturer’ derogation. The derogation will cease to exist from 2036 onwards.
• Manufacturers registering between 10,000 and 300,000 cars may apply for a ‘niche derogation’. This derogation will cease to exist from 2029 onwards.
• Manufacturers may also receive ‘eco-innovation’ credits for innovative technologies. The maximum cap for such credits will be gradually lowered from 2025. These credits will cease to exist from 2035 onwards.

Robust emissions data

Rules apply that aim to ensure the robustness and real-world representativeness of the emissions data recorded by requiring:

• the Commission to monitor the real-world CO₂ emissions and the fuel or energy consumption data of vehicles (see Implementing Regulation (EU) 2021/392);
• type-approval authorities to verify that the CO₂ emissions and fuel consumption values recorded by the manufacturers in the certificates of conformity correspond to the values of those vehicles when in service (see Delegated Regulation (EU) 2023/2867 and Implementing Regulation (EU) 2023/2866).

Life-cycle CO2 emissions

• The Commission will present by 2025 a methodology to assess and report the CO₂ emissions throughout the full life cycle of cars and vans sold on the EU market.
• From 1 June 2026, manufacturers may start reporting life-cycle CO₂ emissions of their vehicles on the basis of this common EU methodology.

Progress report

• By 31 December 2025, and every 2 years thereafter, the Commission must submit a report to the European Parliament and to the Council of the European Union on the progress towards zero-emission road mobility. The report must in particular monitor and assess the need for possible additional measures to facilitate a just transition, including through financial means. In the report, the Commission will consider all factors that contribute to cost-efficient progress towards climate neutrality by 2050.
• Together with the first progress report, the Commission must submit an analysis to identify any funding gaps in ensuring a just transition in the automotive supply chain, with particular attention to small and medium-sized enterprises and the regions that are most affected by the transition. This will, where appropriate, be accompanied by proposals for adequate financial measures to address the needs identified.

Review

In 2026, the Commission is to review the regulation’s effectiveness and impact and submit a report to the Parliament and the Council.