EU Council approves flexibility in CO2 emission rules for carmakers

The Council of the European Union has given its final green light to a targeted amendment of the EU’s CO2 emission standards for new passenger cars and vans, granting car manufacturers increased flexibility in meeting their emission targets for the years 2025 to 2027.

Under the newly adopted regulation, carmakers will now be assessed on the average CO2 performance of their fleets over a three-year period — 2025, 2026, and 2027 — rather than on a year-by-year basis. This change aims to ease compliance burdens during a turbulent phase of the automotive sector’s transition toward zero-emission mobility.

The decision marks the last step in the legislative process. The regulation is set to enter into force 20 days after its publication in the Official Journal of the European Union.

The amendment is part of the broader Industrial Action Plan for the European automotive sector, unveiled by the European Commission on 5 March 2025. The plan identified urgent measures to support the automotive industry amid slowing demand for battery electric vehicles (BEVs) and ongoing supply chain disruptions.

In response to the Council’s approval, the European Automobile Manufacturers’ Association (ACEA) welcomed the move.

“The introduction of a three-year averaging mechanism is a step in the right direction that acknowledges the complexities of this transformation,” said Sigrid de Vries, ACEA Director General.

De Vries emphasized that while the measure offers short-term relief, it does not replace the need for comprehensive long-term support. “While this measure provides some necessary flexibility for manufacturers in the short term, this does not eliminate the need for a reality check for the long-term decarbonisation strategy to ensure that the industry remains competitive and resilient whilst investing in emission reduction technologies.

“There is clearly still a need to double down on enabling conditions for passenger cars and vans to boost the market, including more charging and refuelling stations, purchase and tax incentives, fairer energy prices, and ensuring that our sector can be the competitive powerhouse that we know it can be.”

The European Commission introduced the amendment to provide regulatory stability to automakers during a period when the transition to cleaner vehicles has not met market expectations. The flexibility is expected to help avoid disproportionate penalties for manufacturers struggling to meet their targets amid volatile market dynamics.

Despite the added flexibility, the EU remains committed to its broader climate goals, including the 2035 ban on the sale of new internal combustion engine cars.