EU Sets Ambitious Zero-Emissions Targets for Passenger Cars and Light Commercial Vehicles: A Path Towards Climate Neutrality by 2050

The European Union has taken another important step towards achieving climate neutrality by 2050 by setting ambitious targets for the automotive industry. The recently approved legislation sets the path towards zero CO2 emissions for new passenger cars and light commercial vehicles in 2035, with intermediate emissions reduction targets for 2030 set at 55% for cars and 50% for vans. These targets are designed to reduce CO2 emissions produced by new cars and vans by 100% compared to 2021 levels.

According to the European Environment Agency, the transport sector is responsible for around 25% of the EU's greenhouse gas emissions, with road transport being the largest contributor.

How about e-LCV vs fuel ones?

According to a study by the European Environment Agency, electric LCVs emit about 75% less CO2 over their lifetime compared to diesel LCVs. This is because electric vehicles (EVs) have much lower emissions during their operation, as they don't burn fossil fuels and don't produce tailpipe emissions. Even when accounting for the CO2 emissions from the production of the electricity used to charge the batteries, EVs still have lower lifetime emissions than fuel-powered vehicles.

Another study by the International Council on Clean Transportation found that in Europe, the lifetime CO2 emissions of an electric van are about 40% lower than those of a diesel van on average, assuming a mix of electricity sources in the EU grid.

Manufacturers responsible for small production volumes in a calendar year may be granted a derogation until the end of 2035, while those registering fewer than 1,000 new vehicles per year continue to be exempt. The current zero- and low-emission vehicles (ZLEV) incentive mechanism, which rewards manufacturers that sell more such vehicles with lower CO2 emission reduction targets, will be adapted to meet expected sales trends.

The European Commission estimates that the new legislation will reduce total CO2 emissions by around 1 billion tonnes between 2021 and 2030, equivalent to taking 50 million cars off the road. The European Investment Bank has announced that it will stop funding fossil fuel projects from 2022 onwards, with a focus on financing projects that support the transition to a low-carbon economy, including electric vehicle infrastructure. The bank has committed to investing at least 50% of its financing in climate action and environmental sustainability by 2025.

The new legislation is a major challenge for the automotive industry, but it is also an opportunity to stimulate innovation and investments for car manufacturers. By creating clarity and setting ambitious targets, the legislation encourages the production of zero- and low-emission vehicles, making sustainable driving accessible to everyone. The legislation will also create a second-hand market more quickly, making zero-emission cars more affordable for consumers.

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