EU Updates CO2 Emission Standards for Vehicles
The European Union has amended its CO2 standards for new passenger cars and vans, requiring manufacturers to significantly reduce emissions by 2025, 2030, and 2035. The updated regulation, officially approved in May 2025, introduces a 3-year averaging provision from 2025 to 2027, allowing manufacturers greater flexibility in meeting their CO2 targets.
Key Emission Reduction Targets
- 15% reduction by 2025
- 55% reduction by 2030 (50% for vans)
- 100% reduction by 2035
These targets are measured against a 2021 baseline. The amendment’s averaging provision delays the effective implementation of the 2025 target, as compliance will be assessed based on average emissions over three years rather than the 2025 performance alone.
Impact of the 3-Year Averaging Provision
The flexibility offered by the averaging provision is expected to result in manufacturers exceeding their 2025 CO2 targets and compensating in subsequent years. This delay is likely to lead to:
- More combustion engine vehicles being registered
- Fewer electric vehicles being registered
- Substantial excess CO2 emissions
According to calculations, the 3-year averaging provision will result in additional lifetime CO2 emissions of 26–51 megatons for new passenger cars registered between 2025 and 2029. This excess is equivalent to the total annual CO2 emissions of a country like Denmark or Greece.
Projected Emission Levels
In a realistic compliance scenario, average new vehicle emission levels are expected to be:
- 5.6 g/km higher in 2025
- 2.6 g/km higher in 2026
than they would have been without the regulatory change. The exact impacts will depend on manufacturers’ chosen compliance strategies.
The updated regulation and its implications highlight the complex balance between providing industry flexibility and achieving environmental goals in the European Union’s vehicle emissions policy.
