An amendment to the CO2 standards for new passenger cars and vans in the European Union

European Union (EU) regulation requires vehicle manufacturers to reduce the carbon dioxide (CO₂) emissions of new cars and vans by 15% by 2025, 55% by 2030 (50% for vans), and 100% by 2035 respective to a 2021 baseline. A detailed review of these emission standards is contained in an ICCT Policy Update published in May 2023. This paper highlights the impact of an amendment to the regulation that was officially approved in May 2025.

According to the averaging provision introduced by the amendment, compliance is no longer determined based on the manufacturer’s 2025 CO₂ performance but instead on the average emissions level over the 3-year period from 2025 to 2027.

Because it is expected that manufacturers will exceed their 2025 CO₂ targets and compensate for that in 2026 and/or 2027, averaging results in a delay of the 2025 CO₂ target. While this delay offers manufacturers greater flexibility, it also results in more combustion engine vehicles and fewer electric vehicles registered, and thereby substantial excess emissions.

Illustration of the principal effect of 3-year averaging (2025 to 2027) on the anticipated performance of EU manufacturers

Figure 1. Illustration of the principal effect of 3-year averaging (2025 to 2027) on the anticipated performance of EU manufacturers

We calculate that the 3-year averaging provision will result in additional lifetime CO₂ emissions of 26–51 megatons for newly registered passenger cars in 2025 until 2029. This is approximately equivalent to the total annual CO₂ emissions of a country of the size of Denmark or Greece.

The exact impacts will depend on the compliance strategy manufacturers decide on, but in what is considered a realistic pathway, average new vehicle emission levels would be about 5.6 g/km higher in 2025 and 2.6 g/km higher in 2026 than they would have been without a change in the regulation

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