CO₂ compliance and investments for EU passenger car manufacturers

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Find out how much investment is needed to comply with European passenger car CO₂ emission targets.

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The challenges of the 2025 and 2030 targets

The global movement to reduce greenhouse gas emissions (GHGs) continues to gain momentum. In 2020, passenger cars are required to meet the fleet-wide 95 g/km CO₂ target or pay monetary penalties for non-compliance in the EU market. The European Parliament and the Commission have adopted CO₂ emission performance standards for new passenger cars and vans for 2025 and 2030, which further reduce CO₂ target by 15% in 2025 and 37.5% in 2030 for passenger cars from 2021 target level. Meeting the compliance might appear to be a complex task; however, a synchronized approach towards reducing CO₂ will also create a huge business opportunity.


Following IHS Markit's analysis of the short-term challenges posed by the 2020 EU passenger car CO₂ target, this report provides details on key measures to reduce CO₂ along with an emphasis on resulting incremental powertrain cost. Measures taken to achieve compliance is uniquely assessed for each car manufacturer based on their technical and historical trends as well as their compliance position. IHS Markit Compliance Co$t explores enabling investments, financial implications, and potential benefits for car manufacturers to close their gaps to CO₂ targets. Cost-benefit analysis for different propulsion technologies varies significantly and does play a crucial role in car manufacturers' decision-making process. This report draws on proprietary knowledge and analytical research from IHS Markit structured into three sections:

  1. EU market compliance status based on baseline sales forecast through 2030
  2. Baseline investments and cost forecast
  3. Incremental investments required for car manufacturers to comply in 2025 and 2030, with key car manufacturer prognosis