Proposal to weaken CO2 standards could delay EV progress in Europe 

Berlin, 16 December — Today, the European Commission presented a proposal to review the European carbon dioxide (CO₂) standards for cars and vans, raising concerns about Europe’s future position in the global electric vehicle (EV) race. The plan would weaken the 2035 zero-emissions target for cars and vans by lowering the required CO₂ emissions reduction from 100% to 90%, allowing the registration of all powertrain types—including combustion engine vehicles—from 2035 onwards. This will result in at least one billion tonnes of additional CO₂ emissions. These changes are expected to slow the momentum of Europe’s EV market at a time when global car electrification is accelerating.

“The Automotive Package signals that the European Commission remains committed to car electrification, as the corporate fleets and small affordable electric car initiatives show. But the proposed changes to the CO₂ standards are risky concessions that will delay necessary transformations,” said Jan Dornoff, ICCT’s Research Lead. “Europe’s automotive industry and consumers need technology clarity, not confusion. Even with the best political intentions, clinging to outdated, inefficient, car technologies is not a viable path to tackle the challenges of the fast-paced global transition to electromobility.”

The current standards require vehicle manufacturers to reduce their CO₂ emissions of new cars and vans by 55% by 2030 (50% for vans) and 100% by 2035, respective to a 2021 baseline. The proposal outlines a shift away from 100% zero-emission vehicles by 2035, replacing it with a 90% reduction target and introducing an averaging of CO₂emissions for cars over the period 2030 to 2032. For vans, a substantially relaxed target was proposed for 2030, requiring a CO₂ reduction of only 40%.

“Reversing the phase-out of combustion engine cars and weakening the 2030 target will lower the overall ambition of the regulation, putting investments in charging infrastructure and batteries at risk. As a result, the transition to battery electric vehicles will slow, Europe’s cars will pollute more, and the European automotive industry will lose ground against international competitors,” Dornoff added.

Plug-in hybrids and the emissions gap

The Commission proposal would allow the registration of plug-in hybrid and range extender cars from 2035. However, the actual CO₂ emissions of plug-in hybrid cars, which can operate both as electric and combustion engine vehicles, are only marginally lower than those of combustion engine vehicles and full hybrids. Studies show that on average plug-in hybrids are driving mostly using the combustion engine instead of using electricity, leading to CO₂emissions on average more than four and a half times higher than advertised.

“With plug-in hybrids allowed from 2035, it is important that they have real-world CO₂ emissions similar to the advertised official values. To ensure this, it is essential that the correction of plug-in hybrid CO₂ emission calculation, also known as the Utility Factor curve, planned for 2027, is applied and reviewed regularly thereafter. Otherwise, allowing plug-in hybrids on the road emitting more CO₂ than actually counted will mislead consumers whose fuel bills will be higher than advertised and derail EU CO₂ emissions reporting. In the worst scenario, we would end up with a car fleet with millions of vehicles emitting CO₂ levels similar to combustion engine cars for the next decades, compromising the EU long-term climate objectives, and locking Europe into a declining technology pathway as global vehicle markets move toward fully electric powertrains,” says Dornoff.

The European Commission is proposing to allow manufacturers, from 2035 onwards, to cover up to 3% of the required CO₂ reductions through the use of biofuels and e-fuels, regardless of vehicle powertrain, including conventional internal combustion engine vehicles.

“Linking fleet-wide biofuel crediting to a capped allowance for post-2035 combustion engine registrations would weaken the integrity of the CO₂ regulation by relaxing compliance and prolonging the market presence of vehicles that are neither zero-emission nor carbon-neutral. This undermines regulatory clarity and slows Europe’s shift toward battery electric cars in a global market that is moving decisively in that direction,” says Felipe Rodríguez, ICCT Europe Deputy Director.

Material credits need an unambiguous definition of zero-emission steel

The European Commission also proposed green steel credits as a flexibility for manufacturers to comply with the CO₂ standards. These credits would incentivize manufacturers to reduce emissions in the production of cars and can be used to compensate for tailpipe CO₂ emissions, with a 7% cap.

However, any framework for “low-carbon steel” would need to be “clearly and unambiguously defined, with strict caps on credits, to prevent companies from earning windfall benefits through business-as-usual steel procurement rather than genuine operational change,” explains ICCT Researcher Marta Negri. The role of recycled steel within such schemes would need to be carefully assessed in light of existing regulatory initiatives already incentivizing its use.

Super-credits for small electric vehicles: Opportunities and design risks

One additional element is the proposed introduction of super-credits for small electric vehicles within the CO₂ standards. Such a mechanism would allow vehicles below a defined size to be counted more favorably for compliance purposes, thereby increasing their regulatory value relative to larger vehicles. The precise design parameters and safeguards will be critical in determining whether this approach delivers additional market uptake or primarily redistributes compliance effort.

“Super-credits for small electric vehicles could help redirect manufacturer investment toward a segment that has been largely underserved to date—the mass market for affordable electric cars. This has the potential to accelerate the development and deployment of smaller, lower-cost battery electric vehicles. However, super-credits allow manufacturers to register more combustion engine vehicles and thereby could undermine the ambition of the CO₂ standards. It is therefore important that credits are only granted for vehicles that are affordable but also fulfil consumer needs and that the credits are capped,” says Sandra Wappelhorst, ICCT Research Lead.

Corporate fleets proposal is a step forward in stimulating EV demand

The Automotive Package also includes a proposal for a corporate fleets regulation that would introduce national binding targets, from 2030 onwards, based on the share of zero- and low-emission cars and vans in new registrations by large companies.

“This proposal can help harmonize Member States’ efforts to decarbonize corporate fleets While it covers both zero- and low-emission vehicles, its real value lies in its potential to accelerating the uptake of zero-emission cars and vans in corporate fleets and increasing their future availability in the second-hand market,” says Wappelhorst.

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Media contact 
Susana Irles, Senior Communications Specialist
communications@theicct.org

About the International Council on Clean Transportation (ICCT)
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