COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT REPORT Accompanying the document 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
Date: 2025-12-16
Institutions: Directorate-General for Climate Action, European Commission
Subjects: carbon neutrality, energy consumption, environmental standard, greenhouse gas, labelling, light-duty vehicle, motor vehicle, motor vehicle pollution, pollution control measures, technical standard

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   EUROPEAN COMMISSION  Strasbourg, 16.12.2025  SWD(2025) 1059 final  COMMISSION STAFF WORKING DOCUMENT  EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT REPORT  Accompanying the document 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 {COM(2025) 995 final} - {SEC(2025) 995 final} - {SWD(2025) 1057 final} - {SWD(2025) 1058 final}  
 
 
The framework set out by the EU to become a decarbonised economy by 2050, as enshrined 
in the European Climate Law, can drive competitiveness if objectives and policies are well 
aligned, as it gives certainty and predictability to companies and investors alike.  

The  Regulation  setting  CO2  emission  standards  for  new  passenger  cars  and  light 
commercial vehicles1 is an essential element of the basket of EU measures aimed to achieve 
the  decarbonisation  of  road  transport.  It  drives  a  gradual  transition  towards  zero-emission 
vehicles  and  provides  long-term  certainty  and  predictability  for  investors  along  the  value 
chain, while allowing for sufficient lead time for a fair transition.  

The  Commission's  Industrial  Action  Plan  for  the  European  automotive  sector2  sets  out 
concrete measures to help secure global competitiveness of the European automotive industry 
and  maintain  a  strong  European  production  base.  It  introduces  around  50  flagship  actions, 
including the review of the CO2 emission standards for passenger cars and vans and of the Car 
Labelling Directive. A recent evaluation of that Directive found that buyers of zero-emission 
cars, light commercial vehicles and second-hand vehicles are not served by it, that a lack of 
harmonisation hampers its effectiveness and that it does not sufficiently cover digital tools. 

Four key problems have been identified at the EU level: (1) vehicle manufacturers risk facing 
difficulties in meeting progressively stricter CO2 emission targets in a cost-efficient manner; 
(2) the CO2 standards risk creating a barrier for the continuous innovation and advancement 
of technologies other than zero-emission powertrains; (3) manufacturers of light commercial 
vehicles  face  particular  challenges  to  deploy  ZEV  in  the  market  and  (4)  the  insufficient 
harmonisation  of  adequate  consumer  information  poses  a  problem  by  potentially  restricting 
the demand for zero-emission vehicles. 

The impact assessment also outlines the drivers behind these problems, and the most affected 
stakeholders.  

The  initiative  therefore  aims  to  achieve  the  following  specific  objectives:  (1)  provide  more 
flexibility  for  manufacturers  of  passenger  cars  and  light  commercial  vehicles  to  meet  their 
CO2  emission targets;  (2)  enhance  technology  neutrality  of  the  CO2  emission  standards;  (3) 
maintain  the  contribution  of  the  CO2  standards  towards  the  climate  targets  set  in  the  EU 
Climate Law; (4) maintain certainty and predictability for manufacturers and investors in the 
zero-emission mobility value chain; (5) better serve potential zero-emission vehicle buyers by 
providing 
information,  consequently  supporting  manufacturers’ 
compliance with CO2 standards. 

them  with  adequate 

As the CO2 emission standards for vehicles are set at EU level, the objectives of this initiative, 
can only be achieved at Union level.  

In their replies to  the  public consultation, stakeholders  expressed a wide range of opinions 
regarding the CO2 target levels. Policy stability was identified as essential by some Member 
States,  local  authorities,  environmental  NGOs,  academics  and  the  electricity  sector.  By 
contrast,  most  other  industry  respondents,  alongside  feedback  from  a  mobilised  citizens’ 
campaign,  considered  the  2035  targets  unattainable  due  to  slower  uptake  of  zero-emission 
vehicles than anticipated. Industry representatives generally advocated for giving sustainable 
renewable  fuels  and  off-vehicle  charging  hybrid  electric  vehicles  (OVC-HEV)  a  role  under 

1 http://data.europa.eu/eli/reg/2019/631/2025-07-09 
2 https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52025DC0095 

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the vehicle CO2 standards, in order to increase flexibility and enhance technology neutrality, 
while NGOs and public authorities mostly expressed the opposite view. Industry stakeholders 
also  sought  greater  flexibility  in  the  use  of  fines,  proposing  that  they  serve  as  a  support 
mechanism rather than a punitive measure. Citizens and NGOs generally advocated for using 
the  revenues  to  support  workers,  development  of  charging  infrastructure,  and  demand-side 
measures. A clear majority of stakeholders supported the harmonisation and simplification of 
vehicle  labelling  as  well  as  adding  specific  information  for  zero-emission  vehicles  to  the 
label, but not other additional information. Most stakeholders consider it important to extend 
the  label  to  cover  new  vans.  The  consumer  organisations  called  for  extending  the  scope  to 
second-hand cars.  

Various  policy  options  were  explored,  grouped  in  three  main  categories:  (i)  CO2  emission 
targets  for  cars  and  vans  and  various  flexibilities  facilitating  compliance  (sustainable 
renewable fuels, OVC-HEV, multiannual compliance, super-credits for small and affordable 
ZEV); (ii) financial support via use of fines; (iii) vehicle labelling. Two combinations of the 
options considered under point (i) have been assessed.  

A  preferred  combination  of  options  concerning  targets  and  flexibilities  has  been  identified, 
which  provides  for  more  flexibility  and  technology  neutrality,  while  maintaining  a  stronger 
signal  for investments  in zero-emission  mobility in  the longer term.  Regarding the financial 
support  via  the  use  of  fines,  allocation  of  the  revenues  to  the  Social  Climate  Fund  is  the 
preferred  option.  Regarding  vehicle  labelling,  the  option  covering  the  broadest  range  of 
second-hand vehicles is preferred. 

The preferred combined option regarding the CO2 targets and flexibilities brings benefits for 
manufacturers  in  the  period  2030-2034.  Also,  while  maintaining  the  2035  100%  targets,  it 
enhances  technology  neutrality  by  recognising  a  role  for  well-performing  OVC-HEV  and 
vehicles running exclusively on sustainable renewable fuels beyond 2035. This will stimulate 
continued  investments  in  and  development  of  technologies  other  than  zero-emission 
powertrains, that can be useful for specific use cases and/or for a transitional phasee, possibly 
also  supporting  the  competitiveness  of  some  European  manufacturers  in  other  markets.  As 
shown  in  the  assessment,  the  energy  and  climate  implications  of  the  preferred  option  are 
limited, in particular due to the built-in safeguards. In view of this, the initiative is consistent 
with  the  EU  2050  climate  neutrality  objective  and  2030  climate  target  and  progress  on 
adaptation. 

As regards the use of fines  revenue, the preferred option  would enhance  the  capacity  of the 
Social  Climate  Fund  to  support  vulnerable  households  and  communities  in  the  transition 
towards  sustainable  mobility.  It  should  however  be  noted  that  the  additional  revenue 
generated  is  expected  to  be  uncertain.  The  preferred  vehicle  labelling  option  will  provide 
potential ZEV buyers  with  more  adequate information and  ensure that the  harmonisation  of 
the label design at EU level will effectively lead to simplification and cover all second-hand 
vehicles in an equal manner. The harmonisation removes the need for developing a national 
label design, which results in cost savings for national authorities. 

The preferred combination of options regarding the CO2 targets and flexibilities brings some 
additional  total  system  costs  (capital,  fuel  and  other  operating  costs),  but  does  not  show 
significant changes compared to the baseline.  

The  regulatory  flexibility  provided  by  the  initiative  is  expected  to  enhance  short-term 
competitiveness.  The  preferred  combination  of  options  includes  elements,  which  aim  to 

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achieve  the  necessary  balance  between  regulatory  flexibility  and  enhanced  technology 
neutrality and maintaining the predictability and stability of the long-term signal toward ZEV.  

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