Europe’s current CO₂ standards ignore renewable fuels cutting emissions, which weakens its climate accounting system. In a joint call, several industry signatories call on the Commission to integrate renewable in the forthcoming regulatory review
As the European Commission prepares to publish its proposal for the review of the CO₂ Standards for Light-Duty Vehicles (LDVs), a pivotal moment for Europe’s climate, transport, and industrial strategy is approaching.
In anticipation of this, carmakers, automotive suppliers, and fuel manufacturers have issued a joint statement, forming a united industrial front with a shared ambition to accelerate a competitive road transport decarbonisation. Their core message is that multiple technological pathways, including renewable fuels alongside electrification, will be essential for meeting Europe’s climate goals.
Europe’s commitment to climate neutrality by 2050 requires coherence across its regulatory framework. While the EU’s CO₂ standards for LDVs, the Renewable Energy Directive (RED), and ETS II all aim to reduce transport emissions, they do not yet work seamlessly together. CO₂ standards measure tailpipe emissions only from new vehicles and assume all internal combustion engines run on fossil fuels. Meanwhile, the RED regulates the renewable share in the actual fuel mix across the entire fleet, already delivering measurable CO₂ reductions.
This misalignment means renewable fuels contribute to emissions reduction in practice, but not in the way vehicle emissions are officially counted. This weakens investment signals for renewable fuel production at a time when Europe needs to scale every viable decarbonisation solution for all transport sectors.
Recognising the real contribution of renewable fuels
A Carbon Correction Factor (CCF) would help align regulation with reality. Since renewable fuels represented more than five percent of the EU fuel mix in 2022, it is misleading for CO₂ standards to treat all internal combustion engines vehicles as fully fossil fuelled. Incorporating a CCF would ensure climate benefits already delivered are properly reflected in regulation and in market incentives.
A technology-neutral definition of zero emissions
The statement also calls for establishing a class of vehicles that can operate exclusively on renewable fuels, and for them to be treated as zero-emission, in the same way battery-electric and fuel-cell vehicles already are. Recognising these vehicles ahead of 2035 would not undermine electrification; it would complement it by encouraging earlier investment in renewable fuel production, infrastructure, and innovation.
A clear legal framework for renewable fuels
A unified legal definition of renewable fuels within the CO₂ regulation, aligned with the sustainability criteria in the RED, would remove ambiguity and strengthen investor confidence. The statement also proposes a gradual, predictable increase in the CO₂-reduction requirements for renewable fuels to encourage innovation while preserving existing investments.
Toward a more integrated and resilient climate strategy
Electrification will remain central to reducing emissions from light-duty vehicles. But renewable fuels provide an essential complementary pathway, particularly for reducing emissions from the existing fleet and helping scale clean fuels for aviation and maritime. They also support Europe’s industrial competitiveness and supply resilience.
As the Commission prepares to publish its revised CO₂ standards, this united call from key industrial actors deserves careful consideration. Their proposals strengthen, rather than broaden, Europe’s climate strategy by recognising real-world CO₂ reductions across all technologies.
With coherent, forward looking policy choices, Europe can reinforce its leadership in sustainable mobility through a diversified, competitive and resilient approach to decarbonisation.
Read the call on the European Commission to implement and legally integrate renewable into the CO₂ regulation for LDVs as part of the forthcoming review.
Sign up to The Parliament's weekly newsletter
Every Friday our editorial team goes behind the headlines to offer insight and analysis on the key stories driving the EU agenda. Subscribe for free here.