Explanatory Memorandum to COM(2025)136 - Amendment of Regulation (EU) 2019/631 to include an additional flexibility as regards the calculation of manufacturers’ compliance with CO2 emission performance standards for new passenger cars and new light commercial vehicles for the calendar years 2025 to 2027 - Main contents
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| dossier | COM(2025)136 - Amendment of Regulation (EU) 2019/631 to include an additional flexibility as regards the calculation of manufacturers’ ... |
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| source | COM(2025)136  |
| date | 01-04-2025 |
1. CONTEXT OF THE PROPOSAL
• Reasons for and objectives of the proposal
Regulation (EU) 2019/631 1 sets CO2 emission performance standards for new passenger cars and light commercial vehicles. It is a key contribution to achieve the objectives set in the EU climate law, including the 2050 climate neutrality and the 2030 target to reduce economy-wide CO2 emissions by 55% compared to 1990.
The automotive industry is of key importance for the EU economy and accounts for over 7% of the EU's GDP. It provides jobs - directly or indirectly, in manufacturing, sales, maintenance, construction and transport and transport services - to around 13 million Europeans. The automotive sector is undergoing a structural transformation including changes in clean and digital technologies, in particular the shift towards zero-emission vehicles. The CO2 standards provide long-term certainty and predictability for investors along the value chain, therefore enabling such sectoral transformation, while allowing sufficient lead time for a fair transition.
The regulation requires that the annual EU fleet-wide average CO2 emissions from new cars and new vans are reduced in five-year intervals. In 2025, a target of 15% reduction of CO2 compared to 2021 values starts applying in each year for the 2025–2029 period.
Each year, the average CO2 emissions and the specific CO2 emissions target for each manufacturer are established, based on the EU fleet-wide target, in order to evaluate the manufacturers’ performance in complying with their targets. Manufacturers exceeding their specific emissions target pay an excess emission premium of €95 per g/km for each new vehicle registered.
In the context of the Strategic Dialogue on the Future of the Automotive Industry that took place in Q1 2025 and as announced in the Commission Automotive Action Plan of 5 March 2025, the proposal concerns a targeted change of the Regulation (EU) 2019/631 to provide manufacturers with an additional flexibility as regards their compliance obligations, by providing for a three-year compliance period for 2025, 2026 and 2027, instead of an annual period.
The targeted amendment introduces such additional flexibility for manufacturers while maintaining the level of ambition of the emissions reduction target.
To maintain regulatory certainty and predictability, it is essential that this one-off flexibility to allow compliance over a three-year compliance period is agreed between the European Parliament and Council swiftly and without delay.
• Consistency with existing policy provisions in the policy area
This proposal does not amend the substantive rules of Regulation (EU) 2019/631 and it maintains the targets. The proposal responds to concerns expressed in the EU by the automotive sector, by providing an additional flexibility for manufacturers to comply with the objectives of the Regulation.
• Consistency with other Union policies
The European Climate Law Regulation 2 establishes the framework for achieving climate neutrality within the EU by 2050. The regulation requires the reduction of net EU greenhouse-gas emissions by at least 55% (compared to 1990 levels) by 2030. It requires the Commission to propose a 2040 target. In line with the EU Climate Law reduction targets, Regulation (EU) 2019/631 sets emission reduction targets for cars and vans.
The current proposal does not change the reduction targets and does not lower the overall CO2 emission standards ambitions. By introducing a one-off three-year compliance period for 2025, 2026 and 2027 instead of annual assessment, it allows an additional flexibility for vehicles manufacturers, while keeping the certainty and predictability for investors along the value chain.
2. LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY
• Legal basis
The legal basis for this proposal is Article 192 of the Treaty of the Functioning of the European Union (TFEU). In accordance with Article 191 and 192(1) TFEU, the European Union shall contribute to the pursuit, inter alia, of the following objectives: preserving, protecting and improving the quality of the environment; promoting measures at international level to deal with regional or worldwide environmental problems, and in particular combating climate change. Based on Article 192 of the TFEU, the Union has already adopted policies to address CO2 emissions from cars and light commercial vehicles beginning with Regulation (EC) 443/2009 3 and Regulation (EU) 510/2011 4 .
• Subsidiarity (for non-exclusive competence)
This initiative is consistent with the principle of subsidiarity. Amendment of Regulation (EU) 2019/631 to provide this additional flexibility cannot be achieved by the Member States themselves.
• Proportionality
The proposal is consistent with the principle of proportionality, because it does not go beyond what is necessary in order to achieve the Union’s objectives of reducing greenhouse gas emissions in a cost-effective manner, while providing vehicles manufacturers with a one-off additional flexibility for their compliance while maintaining the level of ambition of the targets.
• Choice of the instrument
The proposal amends Regulation (EU) 2019/631 only as regards providing an additional flexibility on the compliance periods. Thus, it should follow the same form of act, i.e. a regulation.
3. RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS
• Ex-post evaluations/fitness checks of existing legislation
No evaluation is necessary for the proposal, since it only provides for a new and temporary flexibility for vehicles manufacturers to comply with the targets.
• Stakeholder consultations
The Commission held intense and extensive discussions with manufacturers and stakeholders from the automotive value chain in the context of the Strategic Dialogue on the Future of the Automotive Industry that took place in Q1 2025.
• Collection and use of expertise
The proposal has been elaborated following a process of internal scrutiny of existing obligations and is based on experience in implementing the related legislation, including the annual monitoring process of manufacturers’ CO2 compliance.
• Impact assessment
The proposal concerns targeted changes of Regulation (EU) 2019/631 to provide manufacturers with an additional flexibility as regards their compliance obligations. It does not change the level of ambition of the targets.
• Regulatory fitness and simplification
Compared to the current Regulation, the proposal is not expected to increase administrative costs. In addition, it is not increasing the complexity of the legal framework.
• Fundamental rights
The proposal respects the fundamental rights and observes the principles recognised in particular by the Charter of Fundamental Rights of the European Union 5 . In particular, it contributes to the objective of a high level of environmental protection in accordance with the principle of sustainable development as laid down in Article 37 of the Charter of Fundamental Rights of the European Union.
4. BUDGETARY IMPLICATIONS
The legislative financial statement setting out the implications for budgetary, human and administrative resources was attached to the proposal which led to the adoption of Regulation (EU) 2019/631 and its latest revision by Regulation (EU) 2023/851.
5. OTHER ELEMENTS
• Implementation plans and monitoring, evaluation and reporting arrangements
This proposal does not change the substance of the rules, the implementation assessment remains the same as of the proposal which led to the adoption of Regulation (EU) 2019/631, as amended by Regulation (EU) 2023/851.
• Detailed explanation of the specific provisions of the proposal
Article 1(1) amends Article 4 in order to specify the three-year compliance period.
Article 1(2) amends Article 6 to specify that the pooling agreements for 2025-2027 should be communicated to the Commission by end of 2027.
Article 1(3) amends Article 8 to specify the rules on imposing the excess emissions premiums for the three-year compliance period 2025-2027.