EU CO2 Standards

Regulation (EU) 2019/631, as amended by Regulation (EU) 2023/851, sets binding fleet-average CO2 targets for every manufacturer selling new cars and vans in the EU, measured against the 2021 baseline.

What it requires

• Cars (M1): -15% from 2025 (93.6 g/km), -55% from 2030 (49.5 g/km), -100% from 2035 (0 g/km).
• Vans (N1): -15% from 2025 (153.9 g/km), -50% from 2030 (90.6 g/km), -100% from 2035 (0 g/km).
• The 2035 zero-emission fleet target means only zero-emission new cars and vans can be registered from 1 January 2035; conventional combustion-engine registrations are precluded.
• Excess emissions premium: EUR 95 per g/km over target, multiplied by the number of newly registered vehicles (Article 8).

Timeline and current status

• Regulation (EU) 2025/1214, in force since 9 July 2025, lets manufacturers average compliance across 2025-2027 rather than meeting the 15% target each year, easing the immediate 2025 obligation.
• Recital 11 of 2023/851 flagged a future pathway for vehicles running exclusively on CO2-neutral (e-)fuels after 2035; no standalone act has been adopted.
• On 16 December 2025 the Commission tabled an Automotive Package proposing to soften the 2035 target (90% tailpipe plus a 10% offset via e-fuels, biofuels and low-carbon steel). This is a pending proposal, not adopted law as of mid-2026.

Why it matters for the EV market

The targets are the single largest demand driver for EV production lines, battery sourcing and charging rollout in Europe. They sustain hiring in powertrain electrification, fleet-compliance analysis and lifecycle CO2 accounting, even as the December 2025 proposal injects near-term policy uncertainty.