Policy update

EU 2020 CO2 emission standards for cars and vans

On July 11, 2012, the European Commission put forward two regulatory proposals that would implement mandatory 2020 CO2 emission targets for new passenger vehicles and light-commercial vehicles (vans). The proposals now need only be confirmed by the European Parliament and European Council to become law.

Our policy update is here [PDF]. Highlights:

The existing CO2 regulation for passenger vehicles has already led to impressive results: the average CO2 emission level of new vehicles dropped from about 160 g/km in 2006 to 136 g/km in 2011 as measured on the European driving cycle, a 15% reduction. The annual rate of reduction is about twice what it was before introduction of mandatory emission targets.

Some key elements of the proposals:

  • A target value of 95 g/km of CO2 for 2020 for the new passenger vehicle fleet, and 147 g/km of CO2 for vans
  • Vehicle weight as underlying utility parameter—that is, the heavier a manufacturer’s car fleet, the higher the CO2 emission value allowed by the regulation. The factor used for passenger is 0.0333, meaning that for every 100 kg additional vehicle weight, 3.33 g/km more of CO2 is allowed. The slope factor for LCVs is 0.0960.
  • Super-credits for low-emission vehicles. Between 2020 and 2023 every car with specific CO2 emissions of less than 35 g/km will be counted as 1.3 cars, up to a maximum of 20,000 new registrations per manufacturer.
  • As for the 2015 regulation, manufacturers can apply for a maximum of 7 g/km of credits for the use of ‘innovative technologies’ (so-called eco-innovation) which are not covered by the test cycle.
  • Excess emission premium for manufacturers failing to meet their emissions target: €95 for any g/km of excess emissions.
  • A requirement that the Commission review the specific emission targets, modalities, and other aspects of the regulation by 31 December 2014, to establish the CO2 emission targets for the period beyond 2020.

Expected effects of the proposed regulations, as determined by the Commission’s impact assessment, include:

  • Fuel-cost savings per car of around €340 in the first year, and an estimated total of €2,904–€3,836 over the car’s lifetime, as compared with the 2015 target. For vans, fuel-cost savings are estimated at €400 in the first year and €3,363–€4,564 lifetime.
  • €30 billion per year in total fuel-cost savings to consumers.
  • An increase in EU GDP of €12 billion annually, and in annual spending on employment of €9 billion
  • 25% reduction in fuel consumption, saving 160 million tons of oil at around €70 billion at today’s prices
  • Avoided CO2 emissions of around 420 million tons in the period to 2030
  • Negative abatement cost for CO2—that is, a net savings of between €80 and €295 per ton of CO2 avoided

Contact: Peter Mock, peter@theicct.org