CO2 emission standards for new passenger cars and vans in the European Union

On March 28, 2023, the European Union adopted a ground-breaking amendment to the EU light-duty vehicles (LDV) CO2 standards. With this amendment, the EU will be the first major region worldwide to introduce a 100% CO2 emission reduction target for all cars and vans newly registered from 2035 onwards. In addition, the current CO2 reduction target for 2030 was strengthened to -55% for cars and -50% for vans, compared to a 2021 baseline.

This ICCT policy brief reviews the key elements of this regulation and potential risks for the decarbonization of the transport sector. Some highlights include:

• More ambitious emissions reductions, but only from 2030 onwards. The target for 2025 remains unchanged (-15%), and the 2030 target is strengthened from -37.5% to -55%, relative to a 2021 baseline. For 2035, a 100% reduction target is introduced.
• The door is open for e-fuels. An exception for a new category of zero-emission vehicles which run exclusively on synthetically produced CO2-neutral fuels of non-biological origin is expected to be introduced as a Delegated Act. This category could entail numerous disadvantages.
• Incentives for electric vehicles in the EU CO2 standards will end in 2030. The Zero- and Low-Emission Vehicle (ZLEV) credit threshold of 25% is unlikely to substantially accelerate the market uptake of electric vehicles. Instead, it will likely only weaken the CO2 reduction targets.