EU Passenger Car CO₂ Emission Target and Impacts Under the Green Deal

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Discover our projected 2030 passenger car CO2 emission target and how to achieve it under each target scenario.

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The EU market moves towards a more aggressive 2030 passenger car CO₂ target

The European Union is moving towards a carbon-neutral 2050 under the Green Deal initiatives. This requires at least 55% greenhouse gas (GHG) emissions reduction by 2030 from the 1990 level across the economy. The transport sector is facing both the possibly tightened 2030 light-duty vehicle CO2 emission target and the already challenging renewable energy share requirement. Passenger car electrifications for fleet CO2 reduction is considered an important pathway leading to the Green Deal objective.

But what are the gaps to comply in 2030, how much electrification is needed to meet the 2030 target, and at what level of investments will such movements incur?

Under the uncertainty of the 2030 passenger car CO2 emission target, three scenarios are assumed and evaluated:

  1. 37.5% reduction from 2021 based on current legislation
  2. 50% reduction based on the Impact Assessment of 2030 Climate Target Plan
  3. 55% reduction based on a recent EU voting result towards 60% GHG reduction by 2030 from the 1990 level

The IHS Markit baseline powertrain-based sales forecast is used to project 2030 passenger car CO2 emission target and examine the compliance status of the market, along with five top-volume manufacturers. Furthermore, two strategic pathways are evaluated on how to achieve the 2030 target under each target scenario, either by overall powertrain mix upgrade or by dedicated reliance on battery-electric vehicles. Finally, the overall powertrain investments and cost per vehicle (CPV) are quantified under each pathway. The Climate Target Plan, including possible changes in the 2030 passenger car CO2 target and the integration of the emission target with Renewable Energy Directive and Emissions Trading System, will be reviewed by June 2021.

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