The European Commission regulatory proposal for post-2020 CO2 targets for cars and vans

On November 8, 2017, the European Commission (EC) published its regulatory proposal for post-2020 carbon dioxide targets for new passenger cars and light-commercial vehicles (vans). The proposed regulation would be the third set of mandatory vehicle CO2 performance standards in the European Union (EU). This briefing summarizes and evaluates the key elements of the proposal before it enters the process of negotiation between the European Parliament and the European Council.

The annual CO2 reduction rates in the proposal are less ambitious in absolute and relative terms than the current 2020/21 regulations and fall short of the rate of reduction recommended by the European Parliament in 2013. ICCT modeling indicates that the EC proposal, together with potential HDV standards of moderate ambition, would reduce CO2 emissions from road transport by approximately 1.4% per year from 2020 to 2035. To meet the 2050 climate goal, road transport CO2 emissions would then have to decline more than three times as quickly (5.5% per year) from 2035 to 2050.

The proposed sales targets for zero-emission and low-emission vehicles (ZLEVs) incentivize greater deployment of electric vehicles and also push these future electric vehicles to achieve greater electric range over time. To ensure a greater and more predictable market penetration of electric vehicles that is more in line with long-term climate stabilization, the regulations could set more stringent CO2 reduction targets, change the ZLEV targets to incorporate a two-way adjustment scenario, or change the ZLEV targets from rewards to enforceable requirements with a penalty mechanism.

The transition to the World Harmonized Light Vehicles Test Procedure (WLTP) introduces an element of uncertainty regarding the absolute CO2 target levels for 2025/30. Depending on the development of the vehicle market between now and 2020, the proposed EC target values are likely to move further away from the CO2 reduction range originally envisioned by the European Parliament. As an alternative approach, defining 2025 and 2030 CO2 targets in absolute (g/km) terms, applying a technically sound NEDC-WLTP conversion factor, would provide more planning security and would eliminate potential for gaming.