Council adopts EU regulation on emissions for new vehicles

The proposal to revise the carbon dioxide (CO₂) emissions performance standards for cars and vans is part of the ‘Fit for 55’ package, first presented by the European Commission in July 2021. The package will enable the EU to reduce its net greenhouse gas emissions by at least 55 percent by 2030 compared to 1990 levels and to achieve climate neutrality in 2050.

The Council adoption on March 28, 2023, is the last step of the decision-making procedure and the regulation will enter into force twenty days following its publication in the EU’s Official Journal.

“Zero-emission” mobility

The new rules aim to reduce emissions from road transport which has the highest share of emissions from transport – and provide the “right push” for the automotive industry to shift towards zero-emission mobility while ensuring continued innovation in the industry.

The new rules set the following targets:

• 55 percent carbon dioxide (CO₂) emission reductions for new cars and 50 percent for new vans from 2030 to 2034 compared to 2021 levels;
• 100 percent CO₂ emission reductions for both new cars and vans from 2035

A regulatory incentive mechanism for zero- and low-emission vehicles (ZLEV) will be in place from 2025 until the end of 2029.

As part of this mechanism, if a manufacturer meets certain benchmarks for the sales of zero- and low-emission vehicles it can be rewarded with less strict CO₂ targets.

The benchmark is set at 25 percent for cars and 17 percent for vans.

Reference to electro-fuels

The regulation contains a reference to electro-fuels (eFuels), whereby following a consultation with stakeholders, the Commission will make a proposal for registering vehicles running exclusively on CO₂-neutral fuels, after 2035, in conformity with EU law, outside the scope of the fleet standards, and in conformity with the EU’s climate neutrality objective.

The regulation includes a review clause that foresees that in 2026, the Commission will thoroughly assess the progress made towards achieving the 2035 100 percent emission reduction targets and the possible need to review them.

The review will take into account technological developments, including with regard to plug-in hybrid technologies and the importance of a viable and socially equitable transition towards zero emissions.

I’m happy to see that the EU is delivering on its promises with the Fit for 55 package. The new rules will bring opportunities for cutting-edge technologies and create the momentum for industry to invest in a fossil-free future, commented Romina Pourmokhtari, Swedish Minister for Climate and the Environment.

In addition, the regulation includes other provisions such as:

• gradually reducing the cap of emission credits that manufacturers can receive for eco-innovations that verifiably reduce CO2 emissions on the road, to a maximum of 4g/km per year from 2030 until the end of 2034 (currently set at 7g/km per year);
• a common EU methodology, to be developed by the Commission by 2025, for assessing the full life cycle of CO₂ emissions of cars and vans placed on the EU market, as well as for the fuels and energy consumed by these vehicles;
• the regulation maintains a derogation for small-volume manufacturers until the end of 2035.

The proposal revises existing rules, last amended in 2019. According to the regulation, every manufacturer must ensure that the average CO₂ emissions from its fleet of newly registered vehicles in a calendar year do not exceed its specific annual emissions target.

If they do, the manufacturer must pay a premium of EUR 95 per gram CO₂/km above the target per vehicle registered. Consequently, with the new targets agreed upon, zero-emission vehicles will eventually become cheaper than vehicles running on fossil fuels.

The related revision of the deployment of an alternative fuels infrastructure (AFIR) will boost the development of an infrastructure for drivers to recharge their vehicles across the member states.