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CO2 emission performance standards for passenger cars and light commercial vehicles
The Regulation setting CO2 emission performance standards for new passenger cars and for new light commercial vehicles (light duty vehicles – LDVs) contributes to the achievement of the EU's commitments under the Paris Agreement, reduces fuel consumption costs for consumers and strengthens the competitiveness of EU automotive industry and stimulates employment. The regulation was proposed by the Commission under the Fit for 55 package in July 2021 and published in the Official Journal of the European Union in April 2023. In December 2025, the European Commission presented its reviewed Regulation proposal which should be adopted by the co-legislators by the end of 2026.
Targets
For new passenger cars, the average emissions of the new passenger car EU wide-fleet is of 95 gCO2/km from 1st January 2020 onwards. Until the 31st December 2024, the regulation will be further complemented with additional measures to achieve a reduction of 10 gCO2/km. From 1st January 2025, the target is to be reduced by 15%. From 1st January 2030, a reduction of 55% on the initial target is applicable. Lastly from 1st January 2035, a reduction of 100% to the target is applied, meaning that all new passenger cars should be zero emissions.
For light commercial vehicles, the initial target is of 147 gCO2/km, with a reduction of 15% from 1st January 2025 and a reduction of 50% from 1st January 2030. As with passenger cars, from 1st January 2035, all new light commercial vehicles should be zero emissions.
Following the Automotive Action Plan publication in March 2025, the Regulation was revised to give automakers flexibility for reaching the 2025 emission reduction threshold, that is now being calculated over the period from 2025 to 2027. In December 2025, the European Commission published the Automotive Package, which included the proposal for revision of the Regulation, detailed below.
Penalties
The 2023 version of the Regulation maintains existing rules on penalties as non-compliant manufacturers must pay an 'excess emissions premium', corresponding to €95 for each gram of CO2 emission above its specific emissions target and per newly registered vehicle. CO2 emissions, as well as fuel or energy consumption are tested for real-world representativeness by the Commission, following the WLTP standard.
Incentive mechanisms
The revised regulation retains the support mechanism to encourage the sale of new zero and low emission LDVs. This mechanism may be adapted to meet expected sales trends. From 2025 to 2029, the ZLEV benchmark (Zero Low Emission Vehicle) is set at 25% for the sales of new cars, and 17% for new vans, and as of 2030 the incentive will be removed.
The Commission was supposed to evaluate the possibility of developing a common methodology for the assessment and reporting of the full life-cycle CO2 emissions of cars and vans. The evaluation phase is still in progress after two stakeholder workshops organised in December 2024 and July 2025.
Eco-innovation and life cycle
Current rules cap eco-innovation credits at 7 g CO2/km. The new Regulation will reduce that cap in line with the target levels to ensure a balanced proportion of the level of that cap in relation to the average specific emissions of CO2 of manufacturers. The total contribution of those technologies to reducing the average specific emissions of CO2 of a manufacturer may be up to:
- 7g CO2/km until 2024;
- 6g CO2/km from 2025 until 2029;
- 4g CO2/km from 2030 until and including 2034.
Also, new rules mandate the Commission to publish by end of 2025 (not yet been published as of May 2026) a report setting out a methodology for the assessment and the consistent data reporting of the full life-cycle CO2 emissions of LDVs that are placed on the Union market.
Pooling, exemptions and derogations
The provisions on pooling between manufacturers are the same as under the previous Regulations. Pooling between car and van manufacturers is not possible.
Derogations apply for manufacturers responsible for less than 1 000 new vehicle registrations, whereas the derogation for manufacturers responsible for between 1 000 and 10 000 cars or between 1 000 and 22 000 vans will end in 2035.
Review
Part of the Automotive Package, the European Commission published its reviewed proposal in December 2025. The text proposes a new reduction target, revising its 2035 emission reduction target from 100% to 90% compared to 2021. Carmaker’s fleet emissions would have to say below 11g CO2/km and below 18g CO2/km for vans in 2035. New plug-in hybrid, range extenders, mild hybrids and internal combustion engine vehicles would be allowed to be sold beyond 2035.
The proposal also includes compliance option, allowing to compensate the remaining 10% emission by credits generated from using either low-carbon steel made in the Union (in the limit of 7% of manufacturer’s refence emissions in 2021) or e-fuels and biofuels (up to 3%)
On vans, a new intermediate 2030 CO2 targets has been proposed, allowing vans only to comply with a 40% reduction, compared to 50% under the current standards.
In compliance with the ordinary legislative procedure, the proposal has been forwarded to the European Parliament and the Council. The Parliament published its own draft report in May 2026.
What's in it for hydrogen?
The regulation incentivises manufacturers to integrate an increasing share of low- and zero-emission vehicles in their fleet to meet their average CO2 emission reduction targets. The first due date, by which manufacturers had to reach their individual emission reduction target was 2021. This means that strong incentives to lead decarbonisation efforts are already implemented in order for manufacturers to be compliant in 2021.
This legislation bolsters the integration of ZLEV in manufacturers' fleets and could enable their scaling up and rolling out. As part of other ZLEV types, FCEVs (Fuel Cell Electric Vehicle) and other hydrogen fuelled cars and vans will benefit from these development opportunities. Although it will face competition from BEV (Battery Electric Vehicle) and PHEV (Plug-in Hybrid Electric Vehicle) - reinforced by the reviewed text proposed by the Commission in December 2025 -, FCEV provide for an adapted and cost-effective solution especially for long-range and intensive use cases.
The review of the Regulation sends a positive signal for hydrogen development. The inclusion of EU‑produced low‑carbon steel could contribute to the emergence of a lead market for hydrogen-based clean steel. The 3% e-fuels or biofuels compliance option may also create additional demand for hydrogen. As a reminder, hydrogen combustion engines remain eligible to contribute to emission reduction.
Links to Legislation and additional information:
Regulation (EU) 2019/631 of the European Parliament and of the Council of 17 April 2019 setting CO2 emission performance standards for new passenger cars and for new light commercial vehicles
Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Regulation (EU) 2019/631 as regards CO2 emission performance standards for new light duty vehicles and vehicle labelling and repealing Directive 1999/94/EC
Regulation (EU) 2017/1152
Regulation (EU) 2017/1153
Regulation (EU) 2017/1151
