Road transport decarbonisation

Road transport is a major source of greenhouse gas emissions in the EU. In 2023, it accounted for almost 73% of the EU transport sector’s greenhouse gas emissions and 22.6% of the EU’s total greenhouse gas emissions. Reducing the carbon intensity of road transport is therefore essential to achieving the EU’s climate objectives.

In the EU, road transport decarbonisation is addressed through several legislative initiatives covering passenger cars, vans, heavy-duty vehicles and corporate fleets. These initiatives set requirements for reducing the carbon dioxide emissions of new vehicles and aim to accelerate the transition towards lower-emission mobility.

The main measures include the Regulation on CO₂ standards for cars and vans, also referred to as light-duty vehicles, the proposed Clean Corporate Vehicles Regulation and the CO₂ emission standards for heavy-duty vehicles.

CO₂ standards for cars and vans

The Regulation on CO₂ standards for cars and vans sets fleet-wide CO₂ emission performance standards for new passenger cars and light commercial vehicles. The Regulation was revised in 2023 as part of the Fit for 55 package and introduced a 100% reduction target for the tailpipe emissions of new cars and vans from 2035.

In December 2025, the European Commission proposed a further revision of the Regulation as part of the Automotive Package. The proposal would provide additional flexibility and introduce greater recognition of technological options beyond electrification. It would replace the 100% tailpipe emission reduction target from 2035 with a 90% target, with the remaining emissions compensated through the use of low-carbon steel produced in the EU or through e-fuels and biofuels.

The proposal also includes multiannual compliance for the 2030 to 2032 period, incentives for certain small electric cars manufactured in the EU and a reduction of the 2030 target for vans from 50% to 40%. As of June 2026, the proposal was progressing through the EU legislative process.

Clean corporate vehicles

In December 2025, the Commission also presented a proposal for a Clean Corporate Vehicles Regulation. The proposal aims to increase the uptake of zero- and low-emission cars and vans in corporate fleets. It would require Member States to ensure that, from 2030, a specified share of new corporate cars and vans registered by large companies are zero- or low-emission vehicles.

The Clean Corporate Vehicles proposal is closely connected to the CO₂ standards for cars and vans, because both initiatives influence the technologies and energy sources used to decarbonise light-duty road transport.

CO₂ emission standards for heavy-duty vehicles

The Regulation on CO₂ emission standards for heavy-duty vehicles, including lorries, buses and coaches, was amended in 2024 to extend its scope and strengthen its emission reduction targets.

A targeted amendment adopted in March 2026 introduced temporary flexibility in how certain manufacturers can earn emission credits towards their 2030 targets. The substantive rules governing CO₂ standards for heavy-duty vehicles are due for revision in 2027.

FuelsEurope’s position and recommendations

FuelsEurope believes that the decarbonisation of road transport, including light-duty vehicles, heavy-duty vehicles and corporate fleets, should be technology-neutral and should recognise the role of sustainable fuels and vehicle technologies alongside electrification.

The economic and scientific case for sustainable fuels in road transport is becoming increasingly compelling. To ensure that all relevant technologies can contribute to the decarbonisation of European road transport, FuelsEurope calls for:

• Recognising vehicles exclusively running on eligible fuels (VEEFs) as zero-emission vehicles under the CO₂ standards, through a dedicated vehicle classification supported by robust monitoring and certification methodologies.
• Broadening the range of eligible fuels under Article 5a of the proposed revision of the CO₂ standards for light-duty vehicles to include all sustainable fuels compliant with the Renewable Energy Directive. This should apply to both vehicles exclusively running on eligible fuels (VEEFs) and the fuel credit mechanism.
• Crediting sustainable fuels with a zero-emission factor, reflecting that the carbon dioxide emitted during their use is circular and does not increase the concentration of carbon dioxide in the atmosphere.
• Improving the fuel credit mechanism by removing the 3% cap and the 1% sub-cap for Annex IX Part B biofuels. The contribution of eligible fuels should reflect their actual market deployment and should not be subject to a 10% ceiling.
• Enabling the earlier deployment of eligible fuels, allowing them to contribute to road transport decarbonisation from the entry into force of the revised Regulation on CO₂ standards for light-duty vehicles.
• Ensuring a consistent approach to corporate vehicles by recognising the contribution of sustainable fuels under the Clean Corporate Vehicles initiative in a way that is aligned with the revision of the CO₂ standards for light-duty vehicles.

Sustainable fuels and electrification

Sustainable fuels are not simply an alternative to road transport electrification. They can provide vehicle manufacturers with a viable and climate-neutral compliance option. FuelsEurope considers that the limited recognition of sustainable fuels in the European Commission’s proposed revision of the CO₂ standards should be expanded to reflect market realities and provide manufacturers with an additional sustainable compliance option.

International developments since the publication of the Commission’s proposals have had serious implications for Europe’s energy and raw material dependencies. FuelsEurope therefore considers that the relevant legislation should take account of these risks, by helping the business case for sustainable homegrown biomass-to-fuel production.

Scaling up sustainable fuels can complement electrification and support efficient and cost-effective pathways towards climate neutrality. It can also help maintain consumer choice, affordability and equal access to mobility.

FuelsEurope considers that transport decarbonisation should focus on the carbon intensity of the energy used, rather than solely on powertrain technology. An internal combustion engine vehicle fuelled with sustainable fuels can have a life-cycle carbon footprint comparable to that of an electric vehicle powered by renewable electricity. Sustainable fuels are also compatible with existing vehicles, logistics infrastructure and refuelling facilities.

Recognising sustainable fuels under the CO₂ standards for light-duty and heavy-duty vehicles could help unlock their production at industrial scale. This could also support the availability of more affordable sustainable fuels for hard-to-abate sectors, including heavy-duty road transport, aviation and maritime transport.

Engagement with the EU institutions

FuelsEurope, in close cooperation with associations representing the automotive supply chain, commercial transport and sustainable fuel producers, stands ready to engage with the European Commission, European Parliament and Council.

This engagement will cover the interinstitutional negotiations on the proposed revision of the CO₂ standards for light-duty vehicles, the proposed Clean Corporate Vehicles Regulation and the planned revision of the CO₂ standards for heavy-duty vehicles. FuelsEurope aims to contribute to the development of effective policies supporting the EU’s climate objectives.