Working Paper

Reducing CO2 emissions from road transport in the European Union: An evaluation of policy options

The European Union’s 2030 climate and energy framework requires the transport, building and agriculture sectors to reduce greenhouse gas emissions to 30 percent below a 2005 baseline by 2030. This study demonstrates that meeting that goal depends on deploying a combination of new transport policy measures that include mandatory carbon dioxide (CO2) standards for both passenger vehicles and heavy trucks, improving vehicle emissions testing regulations, and accelerating the transition to electric vehicles.

The analysis shows that if current policies remain unchanged, CO2 emissions from cars and trucks in the EU will likely increase by 7.6 percent from 2005 to 2030, reaching 960 million metric tons (Mt) per year in 2030. Tightening the mandatory CO2 target for new passenger cars from 95 grams per kilometer (g/km) in 2021 (as measured on the New European Driving Cycle) to 78 g/km in 2025 and 60 g/km in 2030 would prevent 95 Mt of CO2 per year in 2030. However, setting a target of 68 g/km for 2025 and 42 g/km for 2030 would further increase carbon emissions averted, to 144 Mt per year in 2030. Strengthening the vehicle emissions testing system in Europe, by introducing a not-to-exceed limit for CO2 under real-world driving conditions, would help close the gap between laboratory and real-world values, and would avoid another 25 Mt of CO2 per year by 2030.

In contrast to other major automotive markets, the EU does not currently regulate CO2 emissions from heavy trucks. Introducing mandatory CO2 standards for new trucks in 2025 could prevent about 17 Mt of CO2 per year in 2030. If such standards were introduced even earlier, in 2020—a feasible idea, given that the EU is already expected to require CO2 certification of heavy-duty vehicles (though not, at this point, to take the next step and set an emissions performance standard) in 2018—that effect would more than triple, to about 55 Mt of averted CO2 emissions per year in 2030.

Accelerating the transition to electric-drive of the passenger car fleet in Europe, with the aim of seeing electric vehicles reach a 23 percent share of the new car market in 2030, could prevent another 19 Mt of CO2 in that year. By contrast, including the transport sector into the EU’s Emissions Trading System, an idea that some in industry and on the European Council have floated, would not produce any significant CO2 reductions.

By implementing a comprehensive set of policy measures, including not only those outlined above but also support for advanced biofuels and higher fuel taxes, CO2 emissions could be reduced by a total of 282 Mt per year in 2030, which is 24 percent below the 2005 baseline. Additional measures, not directed to the deployment of vehicle technologies and fuels, would still be required to meet the 30 percent reduction requirement defined by the European Union’s 2030 climate and energy framework.

Direct CO2 emissions from passenger cars and trucks in various policy option narratives, 2005–2030.