EU proposes flexibility in CO2 emission standards for 2025-2027

The European Commission has proposed an amendment to the EU’s CO₂ emissions standards for new passenger cars and light commercial vehicles. The current CO₂ emissions regulation (EU) 2019/631 mandates that each year, car and van manufacturers must comply with strict CO₂ emissions targets—or pay penalties.

The proposal aims to offer additional flexibility without lowering the emission reduction ambition. Manufacturers will still face excess emissions premiums if they exceed their emissions target, but these premiums will now be calculated based on the three-year compliance period. This means a carmaker could exceed the limit in 2025 or 2026, as long as they make up for it by reducing emissions more significantly in the other year(s).

The legislative update aligns with the EU’s broader climate goals under the European Green Deal and Fit for 55 package. These targets require:

• Passenger cars to reduce CO₂ emissions by 15% by 2025, 55% by 2030, and 100% by 2035 (compared to 2021 levels), effectively phasing out the sale of new internal combustion engine vehicles by 2035.
  
• Light commercial vehicles (vans) must achieve a 15% reduction by 2025, 50% by 2030, and 100% by 2035.

The change follows discussions with stakeholders from the automotive sector during the Strategic Dialogue on the Future of the Automotive Industry, held in early 2025.

Pascal de Lavier, EU climate policy advisor, stated that the introduction of this flexibility should help the automotive industry manage the challenges of reducing emissions while ensuring a fair transition towards sustainable solutions. The proposal has already been discussed with various stakeholders, including manufacturers, to ensure it meets the sector’s needs.

The proposal is still subject to approval by the European Parliament and the Council of the European Union.

“We call on the European Parliament and Council to ensure the fast adoption of this amendment,” said Sigrid de Vries, director general of the European Automobile Manufacturers’ Association (ACEA). “The next important step is then to thoroughly assess the transformation’s overall progress, with a focus on refining the approach – not the end goal – where necessary. This is no less important for the commercial vehicles sector: with zero-emission trucks accounting for only 2% of all new registrations, this vehicle segment urgently needs an acceleration of the review of its CO₂ standards to 2025, too, based on an assessment of the sectors’ enabling conditions,” said de Vries.