Proposal to relax CO2 targets for car makers confirmed in Europe

The European Commission has formally published proposals to relax CO2 targets for car makers, meaning they don’t have to meet standards initially set for this year and 2026 until the end of 2027.

Instead of reporting annual figures from now, the proposal means “During the period 2025 to 2027, manufacturers should ensure that the average specific emissions of CO2 of their vehicles do not exceed an emissions target, calculated as the average of their annual specific emissions targets over the period,” the EC says. That means compliance will not be assessed until the end of 2027.

The proposals were first announced in March but still need to be voted on by the European Parliament and the European Council before they become law, and opposition from the environmental lobby is already building. Some say the EC used unrepresentative 2024 EV sales data to argue for the new flexibility, whereas sales show signs of an improvement in EV take-up in 2025. This increase may now be threatened as car makers are able to sell more petrol or diesel vehicles without falling foul of CO2 targets.

Car makers in turn, say limited EV demand, along with intense competition from lower-priced - and state subsidised - Chinese EVs, is damaging the prospects for European manufacturers struggling to remain competitive.

The car industry in the UK is still waiting to hear the government’s response to its consultation on revising the Zero Emissions Vehicle Mandate, which is currently set to remove new petrol and diesel cars from sale in the UK by 2035. Labour had a manifesto pledge before the election to bring the ban forward to 2030, but has also faced intense lobbying from the automotive industry, which says it can’t afford to meet ZEV Mandate targets without the help of more government incentives.

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