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CO2 emissions from cars and vans

Overall state of play

Evaluation of Regulations (EC) No 443/2009 and (EU) No 510/2011 finalised in 2015, external evaluation study

Commission Proposal:

Adopted on 8 November 2017, COM(2017)676 (covering both cars and vans)

Adopted on 14 July 2021, COM (2021)556 (Commission Proposal to amend Regulation (EU) 2019/631 part of the “Delivering the European Green Deal” package

Legal act:

Adopted - Regulation (EU) 2019/631 setting CO2 emission performance standards for new passenger cars and for new light commercial vehicles

Pending in legislative procedure

State of play, main conclusions, outlook

Regulation (EC) No 443/2009 set out the initial framework for reducing CO₂ emissions of new passenger cars and was amended by Regulation (EU) No 333/2014 to define the modalities of meeting the 2020 EU fleet-wide target of 95 g CO₂/km. By allowing exemptions from the CO₂ targets for manufacturers with less than 1000 car registrations, the 2014 Regulation reduced the administrative burden without negative effects for the overall CO₂ reductions.

Regulation (EU) No 510/2011 set out the framework for reducing CO₂ emissions from new light commercial vehicles (vans) and was amended by Regulation (EU) No 253/2014, which set out the modalities of meeting the 2020 EU fleet-wide target of 147 g CO₂/km. By allowing exemptions from the CO₂ targets for manufacturers with less than 1000 van registrations, the 2014 Regulation reduced the administrative burden without negative effects on the overall CO₂ reductions.

The external evaluation study of the two Regulations in 2015 concluded that they had a positive impact on emission reductions for cars and vans, on energy security, competitiveness and innovation. They had generated net economic benefits to society despite the increasing divergence between test cycle and real-world CO₂ emissions performance.

On this basis, the Commission adopted on 8 November 2017 a proposal for a Regulation setting new CO₂ standards for cars and vans for the period after 2020 (COM(2017)676).

As explained in the Impact Assessment accompanying that proposal, no significant impact was expected on the administrative costs caused by the legislation. In addition, the proposal would not lead to an increase in the complexity of the legal framework. In line with the findings of the external evaluation study, no changes in the compliance regime or in the level of the excess emissions premium were foreseen. The regulatory system would continue to provide for flexibilities offered to the regulated entities on a voluntary basis to allow them to meet the requirements at a lower compliance cost.

The new Regulation (EU) 2019/631 was adopted in April 2019.

In the European Green Deal context, the Commission adopted in July 2021 a proposal to revise the CO2 emission standards for cars and vans, COM (2021) 556, as part of the “Delivering the European green deal” package. The proposal aims to contribute to the EU’s 2030 greenhouse gas emission reduction target of at least 55% compared to 1990 levels, and to the 2050 climate neutrality objective, by cost-effectively reducing CO₂emissions from new cars and vans. In addition, the proposal aims to provide benefits for consumers from the wider deployment of zero-emission vehicles, in terms of better air quality and lower energy expenditure and stimulate innovation in zero-emission technologies, thus strengthening the technological leadership and competitiveness of the EU automotive value chain and stimulating employment.

The Commission proposes the following EU fleet-wide CO2 emission reduction targets for new passenger cars and vans as compared to the 2021 target:

• From 1 January 2030: 55 % for cars, and 50 % for vans,
• From 1 January 2035: 100 % for cars, and 100 % for vans.

Specific emission targets are set annually for each manufacturer. These are based on the EU fleet-wide targets and take into account the average mass of the manufacturer’s new vehicles registered in a given year, using a limit value curve.

According to the findings of the Impact Assessment, compared to the current Regulation, the proposal is not expected to increase the administrative costs. In addition, the complexity of the legal framework is not increased; the existing provisions, i.e. the ZLEV “bonus” incentive mechanism and the 'small volume' derogation, are proposed to be removed from 2030 onwards, which will contribute to the simplification of the legislation. At the same time, the regulatory system will continue to provide for flexibilities intended to lower the compliance cost for manufacturers. No changes in the compliance monitoring regime or in the level of the excess emissions premium are foreseen. The proposal will therefore neither increase administrative costs for manufacturers and competent national authorities nor enforcement costs for the Commission.

In the inter-institutional negotiations on the proposal, a provisional agreement has been reached, confirming the target levels of the Commission proposal.

State of Play:

Finalised in 2015, external evaluation study

Scope:

Evaluation of Regulations (EC) No 443/2009 and (EU) 510/2011 on CO₂ emissions from light-duty vehicles

Evaluation findings:

The external evaluation study showed that the 2015 (cars) and 2017 (vans) emission targets had both been achieved before the deadline and that manufacturers were in a strong position to meet their 2020 targets. It also showed that the Regulations had a positive impact on emission reductions for cars and vans as well as on energy security. Furthermore, their impact on competitiveness and innovation seemed to be positive.

Concerning the effectiveness of the Regulations, the external evaluation study highlighted one significant weakness, i.e. the increasing discrepancy between real-world and test cycle emissions. This would be addressed by the switch to a new test protocol (WLTP).

The problems with the test cycle also affected the efficiency of the legislation as the benefits had been smaller than anticipated.

Estimated savings and benefits

The external evaluation study found that abatement costs under Regulation (EC) No 443/2009 and Regulation (EU) No 510/2011 were significantly lower than the ex-ante estimates.

Costs to manufacturers have been much lower than anticipated, because abatement technologies have, in general, proved to be less costly than expected. Lifetime fuel expenditure savings have been lower than originally anticipated in the Impact Assessment, primarily because of the increasing divergence between test cycle and real-world emissions performance. Linked to these fuel expenditure savings are losses in fuel tax revenues.

State of Play:

Adopted: COM (2021)556 adopted by the Commission on 14 July 2021 (Proposal to amend Regulation (EU) 2019/631 part of the “Delivering the European Green Deal” package)

Which objective(s) will the Commission pursue?

The general objectives of this initiative are to contribute to achieving climate neutrality by 2050 (i.e. achieve net zero GHG emissions by 2050) and to this end, in line with the 2030 Climate Target Plan, to contribute to reaching at least 55% net greenhouse gas emission reductions by 2030 compared to 1990. This articulation of targets and objectives requires a coherent strengthening of the policy architecture for climate, including the Regulation on CO2 emission standards for cars and vans.

Specific objectives:

1. Contribute to the 2030 at least -55% net GHG emissions target and to the climate neutrality objective by 2050 by reducing CO2 emissions from cars and vans cost-effectively and thereby supporting Member States in meeting their target under the ESR, in case of a continued ESR scope;

2. Provide benefits for consumers and citizens from wider deployment of zero-emission vehicles;

3. Stimulate innovation in zero-emission technologies, thus strengthening the technological leadership of the EU automotive value chain and stimulating employment

Estimated savings and benefits

The preferred option contributes significantly to the CO₂ emission reductions for cars and vans. The projected emission reductions for this sector as compared to 2005 are in the range 32-33% in 2030, 56-66% in 2035 and 83-89% in 2040. It will also contribute to lower air pollutant emissions: the estimated cumulative cost of the avoided pollutants compared to the baseline in the period 2030 to 2040 amounts to 49 to 59 billion euros. Consumer benefits in terms of average net savings in total cost of ownership, averaged over the EU-wide new vehicle fleet, for a 2030 car are up to 330-600 EUR and for a 2030 van up to 340-600, for the first user. They increase to around 2800-3100 EUR for a 2040 car and around 5200-5500 EUR for a 2040 van. Net savings also occur for the second user. Societal benefits over the lifetime are in the range 860-1600 EUR for a 2030 car, and 1000-1200 EUR for a 2030 van. They increase to around 4600-5100 EUR for a 2040 car and 5600-6400 EUR for a 2040 van. Over the period 2030 to 2050, cumulative savings of diesel and gasoline in the range 913-1100 Mtoe are achieved with respect to the baseline, reducing the import dependency of the EU economy. Economy-wide GDP and employment are impacted positively. In particular, the number of jobs increases in 2030, and even more in 2040. However, a loss in jobs related to the production of components for conventional engines is projected, so the reskilling of workers in the sector will be needed to facilitate the transition.

State of Play:

Regulation (EU) 2019/631 adopted in April 2019

Outcome of Legislative Procedure

New EU fleet-wide CO₂ emission targets were set for the years 2025 and 2030 for newly registered passenger cars and light commercial vehicles (vans). The 2025 targets for both cars and vans are 15% below the 2021 starting point, which is based on the EU fleet-wide targets for that year. For 2030, the cars and vans targets are 37.5%, 31% respectively, below the 2021 starting point.

A crediting system was introduced to incentivise the uptake of zero- and low-emission vehicles, based on non-binding benchmarks for the share of such vehicles in a manufacturer’s fleet. Manufacturers exceeding the benchmarks by one percentage point will benefit from a one percent higher CO₂ target. The maximum target relaxation is 5%.

The provisions on pooling and on exemptions and derogations for “small volume” manufacturers were maintained. The derogation possibility for “niche” car manufacturers registering up to 300,000 vehicles per year will end after the year 2028. The “eco-innovation” credits are maintained, but efficiency improvements for air conditioning systems will become eligible as eco-innovation technologies as of 2025.

Two new governance elements aim to reinforce the effectiveness of the Regulation. Firstly, type-approval authorities will have to verify CO₂ emissions of vehicles in-service. Deviations found during such verifications shall be reported to the Commission and taken into account when calculating the average specific emissions of a manufacturer. Secondly, new provisions on the monitoring, reporting and assessment of data from on-board fuel consumption monitoring devices are to ensure that the emission test procedure yields results which are representative of real-world emissions.

Estimated savings and benefits

The targets set in the new Regulation were expected to lead to a 23% reduction of greenhouse gas emissions from road transport in 2030 compared to 2005. Consumers were projected to save around €1,100 over the lifetime of an average new car bought in 2030 and nearly €4,000 for an average new van. Positive impacts were also projected as regards economy-wide employment, with an increase of around 60,000 jobs by 2030 and up to 80,000 if batteries are produced in the EU. The new Regulation will also provide a signal for investors in refuelling and recharging infrastructure.