Putting on the brakes: the shortsightedness of EU car decarbonization policies

Abstract

The EU styles itself as a climate leader, yet its emission reduction objectives are seen as insufficient to limit global warming. While the European Green Deal (EGD) increased the farsightedness of some aspects of EU climate legislation, its objectives still fall short of what is required. To better understand shortsightedness in EU climate policy, this article examines the shortsightedness of sectoral climate legislation: the EU Regulations on the CO₂ emission performance standards of new passenger cars (2009, 2014, 2019, Fit For 55). It applies a shortsightedness framework composed of four criteria: (1) consistency of standards with long-term goals; (2) stringency and (3) adaptability of the legislation; and (4) presence of long-term thinking. The assessment shows that the Car Regulations have been characterized by a high degree of shortsightedness, worsened by loopholes for carmakers and symbolic stringency. While the inconsistency between the car emission standards and the economy-wide emission reduction objectives increased over time, the zero-emissions by 2035 standard of the Fit For 55 Regulation is in line with the economy-wide net-zero by 2050 objective. Research into what drives shortsightedness in the EU could shed light on the nature of this shift.

Introduction

Since the 1990s, the European Union (EU) has reduced its greenhouse gas (GHG) emissions through the development of a comprehensive climate and energy legislative acquis. Nevertheless, it is not on track to do its fair share to limit global warming^1,2. To better align EU climate policy with the Paris Agreement’s objective of limiting warming to below 2 °C and preferably to 1.5 °C, the EU has launched the European Green Deal (EGD), and the objectives of net-zero emissions by 2050 and 55% emission reduction by 2030. Reaching these targets will require significant additional efforts by all economic sectors. However, not all of them have contributed to the same extent to the EU’s emission reductions in the past³. While sectors such as the energy industry have made significant progress, emissions in other sectors such as agriculture have stalled, and the emissions of the transport sector have increased (apart from reductions in 2020 due to pandemic mobility restrictions). As a result, the extent to which the lagging sectors step up their efforts will be crucial for the success of the EGD.

The degree to which EU sectoral climate legislation is in line with its economy-wide emission reduction objectives has not received a lot of attention in the extensive EU climate and energy policy literature. Scholars have looked in detail at the policy formulation and policy design of the main implementing legislation of the economy-wide climate packages such as the Emissions Trading System (ETS) Directive (e.g., ref. ⁴), the Renewable Energy Directive (e.g., ref. ⁵) and the Land Use, Land Use Change and Forestry (LULUCF) Regulation (e.g., ref. ⁶). Nevertheless, few studies have focused on their level of ambition, or on the ambition of sectoral legislation such as the Energy Performance of Buildings (EPBD) Directive or the CO₂ Emission Performance Standards for New Passenger Cars (Car Regulations). As sectoral climate legislation plays a key role in reducing EU GHG emissions, its degree of sufficiency can have a significant influence on the effectiveness and ambition of EU climate and energy policy. Therefore, sectoral climate ambition forms an important but understudied area of research.

Moreover, the literature on myopia or shortsightedness—the bias towards the short term in politics⁷—theorizes that sectoral legislation will be more shortsighted than economy-wide legislation because of the costs it poses on concentrated, organized interest groups^7,8. Scholars argue that policymakers not only have to distribute costs and benefits across actors but also over time when formulating legislation. Consequently, as long-term beneficial or farsighted legislation often has high short-term costs and few visible short-term benefits, policymakers will be discouraged from taking farsighted decisions as it might for instance impede their chances of re-election^8,9,10. Furthermore, the actors affected by the short-term costs are expected to oppose the legislation. If the costs are concentrated on a highly organized group, the opposition strengthens, and the group can pressure policymakers into not taking long-term beneficial decisions. Therefore, sectoral climate legislation that requires significant efforts from concentrated and organized interests, is expected to be more shortsighted than economy-wide climate legislation that imposes costs in a less direct and concentrated manner. However, while scholars have examined why legislation is shortsighted (e.g., ref. ⁸), or what can be done to overcome shortsightedness (e.g., refs. ^11,12), studies comparing levels of shortsightedness across different policy areas are rare, despite the centrality of such an assessment for research explaining the difference.

As the car sector is one of the most polluting and most powerful sectors in the EU, car decarbonization constitutes an interesting case to investigate the EU’s sectoral shortsightedness^3,13. From a shortsightedness literature perspective, the highly organized car industry can be expected to strongly oppose farsighted legislation, resulting in more shortsighted Car Regulations. Researchers within the EU transport policy literature have identified the blocking influence of the car industry by examining its role in the policy process (e.g., refs. ^14,15), its lobbying strategies (e.g., ref. ¹⁶), and its narratives (e.g., refs. ^17,18,19). Additionally, scholars have examined the policy design of the EU Regulations on the CO₂ emission performance standards for new passenger cars (hereafter Car Regulations²⁰), and European Commission officials’ understanding of transport mitigation pathways and their link to economy-wide mitigation objectives²¹. Nevertheless, the level of sufficiency of the Car Regulations to meet the EU emission reduction objectives, and the long-term nature of both their content and their policy design, have received less attention so far.

Against this backdrop, this article investigates the degree to which the 2009, 2014, 2019, and Fit For 55 Car Regulations have been in line with the economy-wide EU emission reduction objectives and hence have been farsighted, to further our understanding of the mechanisms of shortsightedness in climate decision-making. To do so, I apply and refine a shortsightedness framework developed by Gheuens and Oberthür². The framework comprehensively explores different dimensions of the legislation including target levels and different aspects of its policy design, allowing for an in-depth analytical assessment beyond measuring target ambition². Furthermore, it assesses the legislation in relation to the long term, which, due to the long-term nature of climate change, offers valuable insights into the legislation’s degree of sufficiency to combat climate change.

Therefore, the article contributes to the policy shortsightedness literature by illustrating that shortsightedness can vary between economy-wide and sectoral legislation, and that it can change over time. In doing so, it shows that the shortsightedness framework can be applied to more sectoral policy areas with the necessary adjustments. As a result, the article also adds to the growing literature on EU climate and energy policy by investigating the connections and conflicts between economy-wide and sectoral ambition, and by shedding light on the role of the car sector in EU decarbonization.

In line with expectations, the article finds that the Car Regulations have been inconsistent with economy-wide climate ambition. Rather than that stricter emission standards resulted in more farsightedness, they could not keep up with the economy-wide objectives and their shortsightedness increased. Furthermore, shortsightedness trends on the sectoral level were not aligned with those on the economy-wide level. The introduction of regular and comprehensive revisions and the maturing of long-term thinking happened at a much slower pace, and it is only with the politically agreed upon Fit For 55 Regulation that significant steps forward were made. The zero-emissions by 2035 standard indicated a shift towards more farsighted policymaking. Future research can examine whether this is the result of a decrease in the car industry’s influence on the legislation, or of a shift in the car industry’s interests.

I proceed in four sections. First, I introduce the framework used to assess the shortsightedness of the Regulations. Second, I apply the framework to the empirical cases, the 2009, 2019, and Fit For 55 Car Regulations, and to a limited degree the 2014 Regulation. Subsequently, I discuss the results and draw conclusions.

Assessing shortsightedness

To systematically assess the shortsightedness of EU Car Regulations, I use the shortsightedness framework previously developed by Gheuens and Oberthür². It views the shortsightedness of legislation as a property of the policy output—although the shortsightedness of the actors and thus of the policy process is included to a limited degree. In this respect, it attempts to conceptualize the degree to which policymakers have prioritized the short term over the long term. Furthermore, rather than investigating the number of policies (policy density), the framework investigates the content of the policies (policy intensity). While studies examining policy density can shed light on trends in climate policymaking such as on the dismantling of legislation (e.g., ref. ²²), a policy intensity approach is used to gain an in-depth understanding of the Car Regulation’s level of sufficiency.

As such, documents such as adopted legislation or published positions of the institutions, are analyzed using qualitative content analysis. A close reading of the policy output is carried out to examine how shortsightedness is featured in them. Four aspects of the legislation are particularly relevant: (1) the consistency of the standards with overarching long-term goals; (2) stringency; (3) adaptability; and (4) the presence of long-term thinking in the legislation². Whereas assessing the standards can inform us about the degree to which they are in line with long-term emission reduction objectives, examining stringency and adaptability offers a deeper understanding of the likelihood that the targets will be reached and/or updated to stay or to become more aligned with the long-term objectives. Subsequently, the presence of long-term thinking can give an indication of the extent to which policymakers had the long term in mind when formulating the legislation.

As Gheuens and Oberthür² designed their framework with economy-wide legislation in mind, some of the framework’s aspects were adapted to the specifics of sectoral legislation. This concerns mainly the definition of the overarching long-term goals, and a stronger focus on the monitoring and reporting aspect of stringency because a literature review suggested this was particularly relevant for the Car Regulations (see refs. ^23,24,25).

Consistency of the standards

To evaluate the shortsightedness of the legislation’s standards, I use two reference scenarios: a baseline scenario of emission reductions with existing-policy measures, and an ‘ideal’ scenario based on the emission reductions required to be in line with long-term objectives at the time of policy formulation. Therefore, rather than focusing on the ambition of the nominal standards, the framework investigates the efforts the standards make to bring the existing measures in line with what would be required for a policy to be farsighted. Furthermore, by establishing the ideal scenario on the basis of scenarios published around policy formulation, the framework contextualizes these efforts at the specific moment in time they were made. As reliable data on the CO₂ emissions of cars is available from 2000 onwards, the scenarios will be calibrated against the year 2000.

First, a baseline scenario consists of projections of GHG emissions under either an existing-policies or no-policies scenario²⁶. As the EU has developed legislation on car emissions since the 1990’s, using an existing-policy approach offers a more realistic view of the efforts legislation makes. Nevertheless, precisely predicting how car CO₂ emissions will evolve without additional measures is difficult as it requires making economic, technological, and demographic assumptions²⁷. However, the CO₂ emission performance standards seem to be the main driver for emission reductions in the car sector^17,18,27. Therefore, it can be assumed that emissions will stabilize or be reduced at a much lower rate in the absence of additional measures²⁷. Hence, if prior legislation exists, their standards will be taken as the baseline for a given year.

Second, several considerations need to be made when determining the ideal scenario for the mitigation of EU car emissions. Not every sector has the same mitigation potential due to, for example, the availability of low-carbon alternatives. As a result, some sectors might have lower or higher targets than the EU’s overall GHG emission reduction target²⁸. Owing to the difficult decarbonization of some transport modes—e.g., aviation—the EU’s transport emission reduction targets have generally been lower than its overall objectives²¹. Nevertheless, road transport and especially passenger cars have lower projected mitigation costs than transport modes such as aviation and shipping, and can be expected to at least match the ambition of the overall GHG emission reduction target^28,29. Additionally, emission reduction trajectories might best follow a linear approach or prioritize steeper emission reductions early on as reductions generally become more difficult the deeper they get, and a delay could lead to a carbon lock-in and an increase in the cost of action. Early steep cuts also reduce the overall amount of emissions during the phase-out period, thereby allowing policymakers to extend the time until reductions are achieved. Therefore, the ideal scenario range will be based on mitigation scenarios that match the EU’s economy-wide emission reduction targets, complemented by studies that focus on the emission reductions of cars in the EU. As the EU Car Regulations often include interim targets for which no economy-wide target exists, their ideal range will be determined by examining the linear economy-wide mitigation pathway. Using this approach results in a minimum-level ambition reference scenario, as the economy-wide targets have not been sufficiently farsighted to be in line with scientifically derived long-term objectives². Therefore, for the standards to be truly farsighted, they would need to go beyond matching the economy-wide targets.

Third, provisions in the legislation might affect the set standards, so-called flexibilities. Here, I distinguish between: (1) flexibilities that do not influence the target but might prevent it from being overachieved; and (2) flexibilities that lower or delay the emission reductions if fully exploited. The first category includes, for instance, provisions that allow manufacturers to share required emission reductions amongst each other. While these are important, the focus of the assessment will be on the second category. Generally, these flexibilities relate to the timing of targets and the calculation of manufacturers’ average emissions, more specifically the designation of special categories of vehicles that could lead to an overestimation of realized emission reductions.

Stringency

While setting farsighted objectives is a crucial first step in ensuring the farsightedness of the legislation, standards risk being symbolic without a certain degree of stringency or bindingness². Additionally, legislation that is likely to be overturned or watered down in the next policy cycle can be considered more shortsighted. Thus, legislation can only be farsighted if there is to some degree certainty that the objectives will be achieved and maintained. Therefore, drawing from Gheuens and Oberthür² and the hard versus soft governance framework developed by Oberthür³⁰, I suggest four criteria: (1) legal status of the legislation—are the standards enshrined into law or do they remain voluntary; (2) nature of the obligations—are the obligations substantive and/or procedural; (3) prescriptiveness and precision—are the objectives and obligations clearly formulated; and (4) monitoring and reporting provisions to ensure effective implementation—how are the car emissions monitored and reported on and are there any consequences if a target is exceeded^2,30. As the emissions of car models are calculated using laboratory tests, the alignment of the test emission values with real-world emission values forms a crucial part of the stringency of the legislation. Inaccurate test emission values distort the modeled average emissions of car manufacturers and can lead to an overestimation of emission reductions. A carmaker might meet its targets on paper and will thus not be subject to any infringement procedure, while in practice it might greatly overshoot it. Therefore, without a representative monitoring procedure, many of the other aspects of stringency remain symbolic.

Adaptability

To avoid a lock-in of shortsighted legislation and to ensure that it stays up-to-date with the best available science, legislation needs to be regularly reviewed and revised upwards if necessary². The explicit upward direction of the revision ensures that rather than conflicting with the stringency indicator, adaptability complements it. Whereas stringency guarantees that the legislation is not actively watered down, adaptability makes sure that the same or a higher level of farsightedness is maintained as science and the global context develop. As such, the goal of limiting the impacts of climate change remains stable (see also ref. ³¹). International climate agreements, economic shocks, and the speed of technological innovation might facilitate more ambitious mitigation scenarios³¹. For instance, developments in electric vehicles and charging infrastructure might make them more accessible to a wider part of the population^3,29.

Therefore, I arrive at three criteria for assessing the adaptability of the legislation: (1) regularly scheduled opportunities to review and revise the legislation—does the legislation contain provisions on the review of some or all its aspects; (2) the explicit presence of progression included to guide the upward revision—does the legislation include the direction of the scheduled review; and (3) the mention of the best available science to guide the revision—does the legislation refer to any criteria on the basis of which the review will take place².

Long-term thinking

Finally, I examine the intent of policymakers to formulate farsighted legislation by investigating the presence and interpretation of the long term in both the adopted legislation and the positions of the legislative actors (European Commission, European Parliament, and Council of the EU). In practice, this means examining the adopted Car Regulations, the Commission’s proposals, the Parliament’s resolutions, and the Council’s General Approach. If an agreement is reached between the Council and the Parliament before the adoption of a first position, the reports of the Parliament’s committees, and the Council’s preparatory documents were examined. The presence of long-term thinking can serve as a first step in attributing some of the potential shortsighted aspects of the previous criteria². Can the shortsightedness be the result of neglecting long-term considerations, or of misunderstanding what a long-term strategy is and should be? If there are no or incomplete long-term objectives/strategies present in the legislation and the actors’ positions, it should not come as a surprise that the legislation is shortsighted on some or all elements.

I look at three elements in particular: (1) presence of a long-term objective—is the long term mentioned in any way throughout the legislation; (2) definition of the long-term objective—is the objective general or specific and what is it based on, does the legislation refer to any other documents or studies; and (3) mitigation pathway—does the legislation specify a pathway and the role of the mid-term target in it towards the long-term objective².

The level of shortsightedness of EU Car Regulations

I apply the assessment framework to the EU Car Regulations of 2009, and 2019, and to the Fit For 55 revision as part of the EGD. The 2014 Regulation will be analyzed to a limited degree due to its nature as an interim regulation specifying the modalities of one the 2009 Regulation’s standards. The EU has merged the Regulations on the CO₂ emission standards of cars and light commercial vehicles (vans) from the 2019 Regulation onwards. However, as cars make up the bulk of light road transport and for the sake of comparability over time, I only focus on the provisions on passenger cars within the 2019 and Fit For 55 Regulations.

The Car Regulations establish binding CO₂ emission performance standards for new passenger cars in the EU, usually in five-year intervals (2012, 2020, 2025, 2030, and 2035)³². These standards are set at the level of car manufacturers, rather than at the Member State level, and serve to assist Member States with reaching their nationally binding targets under the Effort Sharing Decision/Regulation (for more on Effort Sharing see ref. ³³). Furthermore, the overall target is divided into individual targets for carmakers taking into account the average weight of their cars.

While many more legislative acts directly or indirectly relate to the emissions of cars, I take a focused approach investigating the Car Regulations because improving vehicle efficiency is seen as the main driver for reduced road transport emissions, not surprisingly due to the EU’s prioritization of this approach³. Nevertheless, road transport emissions are not only reduced by improving vehicle efficiency but also by reducing car use through avoiding journeys or shifting to lower-carbon transport modes, and by improving the efficiency of fuels^3,29,34. As such, efforts to truly bring the EU car sector in line with the long term should also include spatial planning and behavioral measures to reduce demand. However, this entails a broader debate about what sustainable mobility means and a more thorough investigation of varying pieces of legislation on different policy levels from the local to the EU. As such, it falls outside the scope of this article.

Consistency of the Car Regulations’ objectives with long-term objectives

The 2009 Car Regulation set out two emission standards for new cars: (1) 130 g CO₂/km by 2012; and (2) 95 g CO₂/km by 2020³⁵. The target for 2012 was to be complemented by measures such as the use of biofuels that were projected to result in an additional reduction of 10 g CO₂/km.

The 2009 emission standards closed the gap between the baseline and the ideal scenario by around 68 to 81% (see Fig. 1). Without any additional measures, average car emissions would be 151 g CO₂/km by 2012 and 139 g CO₂/km by 2020²⁷. Concerning the ideal scenario, few studies on the required car emission standards were published at the time of policy formulation. However, already in the 90 s, the car industry and the European Commission set a standard of 120 g CO₂/km first by 2005, and later by 2012¹⁵. Therefore, to not backslide prior ambition, the EU should ideally maintain the standard of 120 g CO₂/km by 2012. If the emission standards continue to follow the linear emission reduction trajectory required to meet that standard, the 2020 standard would be around 85 g CO₂/km. Furthermore, these standards align with the standards required to reach the economy-wide target of 20% emission reduction by 2020 compared to 1990 of the 2020 Climate and Energy Package. To be in line with that target, an emission standard correlating to 20% reduction compared to 1990 would have needed to be reached already in 2005. That way, the majority of all passenger cars—not only new ones—would emit 20% less emissions compared to 1990 in 2020. If the emission standards were to continue the linear emission reduction trajectory required to reach 20% by 2005, the standards would be around 120 g CO₂/km by 2012 and around 80 g CO₂/km by 2020. While it could be argued that these standards could lead to an overachievement of the 20% by 2020 target, stricter standards could compensate for the lack of standards until 2012, and hence the presence of more polluting vehicles in the fleet. Consequently, as Fig. 1 shows, the 130 g CO₂/km by 2012 standard closed the gap with the ideal scenario by around 68% and the 95 g CO₂/km by 2020 standard closed it by 75–81%.

Fig. 1: An overview of the ideal, baseline, and legislation scenarios for the 2009 Car Regulation.

Source: see text.

Therefore, while the standards are close to what is required, they are inconsistent with the overall EU emission reduction objectives. Their inconsistency increased due to the flexibilities included in the legislation³⁵. First, a gradual phase-in of the standards delayed the emission reductions until 2015. Second, the Regulation created a system of super-credits that resulted in an underestimation of manufacturers’ emissions. Super-credits give low- or zero-emission vehicles (ZLEV) a heavier weight when calculating a manufacturer’s average annual emissions and, by doing so, create a discrepancy between real-world and calculated emissions, in which the real-world emissions will be higher than the calculated average^36,37. Therefore, the standards will be met on paper but not in reality. Furthermore, while the system of super-credits aimed at incentivizing the uptake of ZLEVs, in the long term it can be counterproductive as fewer ZLEVs are required to meet the standards.

The 2014 Regulation expanded these flexibilities by including a phase-in of the 2020 standard until 2021, and by extending the super-credits system until 2023^38,39. However, the use of the system is limited to avoid a large gap between real-world emissions and calculated emissions. Transport & Environment (T&E) and the International Council on Clean Transportation (ICCT) have estimated that because of these flexibilities the actual 2020 standard would be closer to 100 or even 108 g CO₂/km rather than 95 g CO₂/km^40,41.

The 2019 Car Regulation established targets of a 15% reduction in g CO₂/km by 2025 and a 37.5% reduction by 2030, both compared to a 2021 baseline. It also included benchmarks of a 15% share of ZLEVs of new passenger cars by 2025 and a 35% share by 2030⁴². Until 2024, these efforts will be complemented by measures resulting in an additional reduction of 10 g CO₂/km. Noticeably, the standards of the 2019 Regulation are defined as emission reductions in relationship to a reference year (2021), rather than as nominal standards as was the case in the previous Regulations. This is the result of a change in how car emissions are calculated. Owing to large-scale discrepancies between estimated emissions and real-world emissions in the New European Driving Cycle (NEDC) test procedure, the EU decided to use a new, more representative Worldwide Harmonised Light Vehicle Test Procedure (WLTP)³⁶. As the WLTP equivalent of NEDC emission values will most likely be much higher, emission standards in reference to baseline WLTP emission values are meant to ease the transition for carmakers and to avoid drastic emission reductions for them. Consequently, at the time of policy formulation, the precise 2025 and 2030 standards were unknown. The EEA³ has continued to use the NEDC values to estimate the standards, resulting in 80.8 g CO₂/km by 2025 and 59.4 g CO₂/km by 2030³. Provisional data from the EEA⁴³ suggests that the WLTP equivalent of the NEDC values would be 114.7 g CO₂/km. This would significantly increase the nominal emissions allowed under the standards to 97.5 g CO₂/km by 2025 and 71.7 g CO₂/km by 2030. As the EEA³ has continued to use the 95 g CO₂/km in its reports and for the sake of comparability over time, I will use the NEDC values in my analysis, keeping in mind that the standards will most likely be higher.

As such, the 80.8 g CO₂/km by 2025 and 59.4 g CO₂/km by 2030 standards close the gap between the baseline and ideal scenarios by around half to three quarters (see Fig. 2). To be in line with the economy-wide emission reduction target of 40% by 2030 of the 2030 Framework, the ICCT⁴⁴ estimated that the EU needed to set emission standards of 65 g CO₂/km by 2025 and 40 g CO₂/km by 2030. Furthermore, using the same approach as for the 2009 Car Regulation to derive the ideal standards from the economy-wide emission reduction pathway, the standards would need to be around 70 g CO₂/km by 2025 and between 50 g CO₂/km by 2030. Consequently, as the baseline remained at 95 g CO₂/km, the 2025 standard closed the gap with the ideal scenario by around 46–56%, and the 2030 standard closed it by around 65–90%.

Fig. 2: An overview of the ideal, baseline, and legislation scenarios for the 2019 Car Regulation.

Source: see text.

While the standards are still inconsistent with the economy-wide target, the 2019 Regulation also limited flexibilities, improving the legislation slightly on that front⁴². There are no phase-ins of the targets, and the super-credit system is replaced by the introduction of benchmark shares of ZLEV to encourage their uptake. These benchmarks could strengthen the emission reductions rather than weaken them. However, if a carmaker exceeds the benchmark of a 15% share by 2025, their emission reduction target will be weakened.

Lastly, as part of the EGD and the Fit For 55 Package, the EU revised the 2019 Regulation to align it with the objectives of net-zero by 2050 and 55% emission reduction by 2030. The provisional agreement on the revised Regulation between the Council and the Parliament—before formal adoption—included the standards of 55% emission reduction by 2030 compared to 2021, and 100% emission reduction by 2035⁴⁵. Both the baseline and ideal scenario have shifted. The baseline followed the 2019 Car Regulation targets, and the ideal scenario is derived from the updated 55% economy-wide emission reduction target. This resulted in ideal standards of around 25 g CO₂/km by 2025 and 0 g CO₂/km by 2030, an earlier phase-out date than required for the Regulation to be in line with the net-zero by 2050 objective (see Fig. 3). Therefore, because the 2025 target was not revised, its shortsightedness greatly increased considering the more ambitious economy-wide target. Additionally, the revised 2030 target only made limited additional efforts to close the gap to the updated economy-wide 2030 target. Some Member States, including France, Ireland, Sweden and the Netherlands, have announced an earlier phase-out date of 2030, that would increase the car sector’s contribution to the economy-wide 2030 target⁴⁶. Assessing the 2035 standard, the zero-emission standard is in line with the economy-wide net-zero by 2050 objective. As such, while the 2035 standard can be considered farsighted, a case could be made for a faster decarbonization of the car sector.

Fig. 3: An overview of the ideal, baseline, and legislation scenarios for the Fit For 55 Car Regulation.

Source: see text.

Concerning flexibilities, the Regulation maintained the benchmark system of the 2019 Regulation that gives carmakers lower targets if they reach a certain share of ZLEV between 2025 and 2029⁴⁵. However, the 2025 benchmark is raised to a 25% share of ZLEV.

Overall, it seems that the inconsistency and hence shortsightedness of the standards has increased over time, considering the most likely more inconsistent standards of the 2019 and Fit For 55 Regulations due to their use of a higher baseline scenario than the one used in the analysis. This suggests that the car sector has not been able to keep up with the increased economy-wide ambition of the EU. Interestingly, in each instance, the medium-term standards of the Regulations—respectively, for 2020, 2030, and 2035—were more consistent with the economy-wide targets than the nearer-term ones for 2012, 2025, and 2030. This could be another indication of shortsightedness in which near-term costs are transferred to the future. Furthermore, each Regulation contained flexibilities for carmakers to delay or weaken their emission reductions. Even though the later Regulations attempted to limit the flexibilities somewhat, they still impacted the realized emission reductions, and increased the standards’ inconsistency.

Stringency

Most of the stringency provisions seem to have remained stable over time. All Regulations are enshrined in law, and manufacturers have to pay a fine if they exceed their targets^35,38,42,45. In the 2009 Regulation, the amount of the fine depended on the size of the exceedance until 2018, afterwards the fine was set at €95 g CO₂/km for each new car³⁵. Additionally, the Regulations contain substantive and procedural obligations without any significant changes between them. The standards remain legally binding, and the reporting and monitoring obligations remain largely the same.

Nevertheless, the 2019 Regulation made two important changes: one that could weaken and one that could strengthen the stringency of the legislation⁴². First, while the 2012 and 2020 emission standards of the 2009 Regulation are well defined, the 2025 and 2030 standards of the 2019 Regulation are less precise due to the uncertainty surrounding the reference year values. The imprecision of the standards could offer room for carmakers to weaken them⁴⁷. It could give them an incentive to have high test emission values in 2021 as this will result in higher, and thus weaker, 2025 and 2030 emission standards.

Second, a different test procedure that is less easily manipulable will be used to calculate car models’ emissions from 2021 onwards⁴². Already in 2009, first indications emerged that the previous test procedure (NECD) might underestimate real-world emissions due to the manipulation of loopholes by manufacturers⁴⁸. Further studies showed a growing gap between the test emission values of the NEDC procedure and real-world emissions of up to 30–40%^23,39. The discrepancy between test and real-world emissions led to a significant overestimation of emission reductions. As such, it greatly reduced the stringency of the 2009 and 2014 Regulations and made elements such as the fines symbolic. To close the emission gap, a new, less manipulable, test procedure (WLTP) will be used from 2021 onwards as mandated by the 2019 Regulation⁴². Nevertheless, despite its higher accuracy, a gap between test emission values and real-world emission values will most likely persist—albeit it will be a smaller one⁴⁰. The 2019 Regulation also opened the door for the use of portable emission measurement systems (PEMS) that test emissions while driving on the road rather than in a laboratory. This could further close the emissions gap. However, if PEMS were to be used, it would only be after 2030.

The Fit For 55 Regulation maintained these changes. Its standards were imprecise because of the 2021 baseline, and the reported emissions would be more accurate due to the WLTP approach⁴⁵. Additionally, the Regulation included provisions for a close monitoring of the gap between real-world and test emission values with the objective of closing the gap from 2030 onwards.

Overall, the stringency provisions of the 2009 and 2014 Regulations can be considered mostly symbolic due to an unrepresentative test procedure that overestimated cars’ emission reductions. While the transition to the WLTP in the 2019 and Fit For 55 Regulations alleviated this issue, the targets themselves were less precise and the gap between test and real-world emissions persisted. It hence remains to be seen whether the changes will be sufficient to create more stringent legislation.

Adaptability

The adaptability of the Regulations seems to have increased incrementally over time, mainly due to the expansion of the elements included in the scheduled reviews and revisions^35,38,42,45.

The scheduled reviews did not contain a revision of the standards included in the legislation until the 2019 Regulation^42,45. Previously, the review focused either on non-essential elements and the way to reach the standards (2009 Regulation), or on how future standards and legislation can be improved (2014 Regulation). In the absence of a revision of the set standards, the direction of the review was not specified beyond vague declarations on “realistic and achievable” standards³⁸. Once the Regulations’ standards were included in the review, the direction also became clearer, as demonstrated by references to the Paris Agreement and net-zero emissions in the 2019 and Fit For 55 Regulations. Nevertheless, the Regulations did not specify the scientific insights the reviews should be based on, suggesting a gap in the legislations’ adaptability. Additionally, the reviews and revisions seemed to be planned ad hoc rather than following a structured review cycle. The Fit For 55 Regulation mitigated this as it included two-year progress reports and reviews.

Long-term thinking

The long-term thinking of the legislation can be considered insufficient and has only incrementally improved over time^35,38,42,45. The 2009 Regulation included neither a long-term objective for the emission reductions of cars, nor a reduction pathway³⁵. In 2011, the EU formulated its first strategy for the decarbonization of the transport sector⁴⁹. However, the strategy did not have a specific target for car emissions, and its objective of a 60% transport emission reduction by 2050 compared to 1990 was significantly lower than the economy-wide emission reduction objective of 80–95% reduction by 2050. Because of the strategy’s lack of a long-term objective for cars, the long-term thinking of the 2014 Regulation that referred to it can still be considered insufficient³⁸. The 2019 Regulation contained slightly more long-term thinking, as it mentioned the Paris Agreement’s objective, the IPCC, and the EU’s own economy-wide long-term objective for 2050⁴². However, despite clarifying the importance of further reducing CO₂ emissions from cars beyond 2030, the Regulation did not include a precise long-term objective for cars nor a mitigation pathway. Lastly, the long term was somewhat more present in the Fit For 55 Regulation as it also mentioned the more farsighted objective of 90% reduction of transport emissions by 2050, and the necessity of economy-wide negative emissions after 2050⁴⁵.

A close reading of the positions of the Commission, Parliament, and Council showed that there was no clear push from the institutions towards more long-term thinking in their positions on the 2009 and 2014 Regulations^{50,51,52,53,54,55}. The Commission and the Parliament did not mention the long term in their positions on the 2009 Regulation, and only did so in relation to the 2014 Regulation. Discussion of the long term was completely absent from the Council’s positions during this time. Concerning the 2019 Regulation, the institutions referred more strongly to the EU’s long-term transport objective of 60% emission reduction by 2050^56,57,58. Additionally, long-term thinking featured more heavily in the Parliament’s position on the Fit For 55 Regulation^59,60,61. The mentions of negative emissions after 2050 and of the objective of 90% reduction for the transport sector by 2050 seem to originate from its position.

As such, even though long-term thinking has incrementally become more present in the legislation and in the institutions’ positions, the analyzed documents provide no evidence for adequate long-term thinking. Most importantly, a clear long-term car emission reduction objective and a mitigation pathway toward it, remained absent throughout the different legislative processes. Only the Parliament suggested a more concrete net-zero objective in the 2019 process. This suggests that the standards may have an ad hoc quality, rather than being part of a structured pathway to reduce the car sector’s emissions.

Discussion and conclusion

This analysis has revealed that the emission standards embedded in the Car Regulations have been inconsistent with the economy-wide mitigation targets, and that stricter standards did not automatically translate into more farsightedness (see Table 1). On the contrary, the standards could not keep up with the nominal increase in economy-wide emission reduction objectives, and their inconsistency grew. Furthermore, being consistent with the economy-wide targets can be seen as the lowest baseline of farsightedness as these targets themselves fall short of what is scientifically required (see ref. ²). If the car sector’s contribution were to be assessed against the ideal, farsighted economy-wide targets rather than the targets themselves, their shortsightedness would increase significantly, showing the car sector’s limited contribution to mitigating climate change.

Table 1 Summary of shortsightedness evolution of EU Car Regulations.

Furthermore, the flexibilities given to car manufacturers to meet the standards and the symbolic stringency of the 2009 and 2014 Regulations, further increased the discrepancy between the car sector’s contribution and its contribution to be in line with the economy-wide objectives. As a result, the reported average emissions of cars were significantly lower than their real-world average, and the emission reductions were only realized on paper. While these were mitigated to a certain degree in the 2019 Regulation, which had less flexibilities and a more representative test procedure, the Commission had originally set out to start using the WLTP from 2017 onwards and to translate the 2009 Car Regulation’s standard for 2020 from the old to the new procedure³⁹. The insufficient adaptability of the 2009 and 2014 Car Regulations could have contributed to the late transition, as the scheduled legislative reviews were rare and none of them included a revision of the standards of the Regulations themselves. A closer follow-up of progress to the targets with a review attached to it, could have provided an opportunity for an earlier shift to the WLTP.

The increasing farsightedness of some aspects of the Regulations shows the potential that adaptability has to strengthen the legislation’s consistency over time (see Table 1). The stronger review schedule of the Fit For 55 Regulation could speed up the incremental change from the past and bring the Regulations in line with the EU’s climate ambition. At the same time, as the target of 0 g CO₂/km by 2035 is already consistent with the EU net-zero by 2050 objective, the future value of adaptability could be questioned. Nevertheless, regular reviews could accelerate the emission reduction trajectory. The standard of 0 g CO₂/km could be set at an earlier date, and interim targets until 2035 could be established to ensure a linear emission reduction pathway. Furthermore, revisions could also strengthen the farsightedness of other aspects of the Regulation such as by limiting its flexibilities, or by using different tests to close the gap between real-world and test emission values.

Additionally, long-term thinking was mostly absent from the Regulations. When the long term was mentioned, it was often in the context of the economy-wide emission reduction objectives rather than specifically for the car sector. Only once the EU had specified a more concrete long-term car objective in its 2020 Sustainable and Smart Mobility Strategy did the long term featured more adequately in the legislation.

Overall, the EU Car Regulations contained many shortsighted elements that lowered the contribution of the car sector to the economy-wide mitigation objectives. Progress on one aspect was often balanced out by backsliding on another. For instance, the 2019 Regulation introduced a more representative test procedure but had also less precise standards. The Fit For 55 Regulation took important steps in increasing the farsightedness of the Car Regulation and in bringing it in line with the EU’s overall decarbonization strategy. However, the Regulation mainly included elements that could increase the car sector’s contribution to the climate neutrality by 2050 target rather than to the 55% by 2030 target. Other sectors will thus need to step up and compensate for the limited contribution of cars to the 2030 target, and the car sector will need to make significant efforts after 2030 to meet the more farsighted objective.

As a result, the trends in shortsightedness at the economy-wide level were not translated to the sectoral level. Gheuens and Oberthür² showed that the shortsightedness of the objectives of the 2020 Package, 2030 Framework and Fit For 55 Package fluctuated over time with a clear dip in farsightedness concerning the 2030 Framework. At the same time, they found that the adaptability of the legislation quickly increased over time, especially after the introduction of five-year reviews in the Paris Agreement². Furthermore, the long term became a central part of the EGD as net-zero by 2050 was its overarching objective, building on the already more concrete long-term objective of 80–95% reduction by 2050 in the 2030 Framework. Comparing the different policy areas, whereas the economy-wide Fit For 55 Package restored the legislation’s shortsightedness back to the level of the 2020 Package, the Fit For 55 Car Regulation worsened the legislation’s shortsightedness in the near-term as its 2030 standard closed the gap between the old 2030 standard and the economy-wide 2030 target in a very limited way. Additionally, the trends to increased adaptability and long-term thinking happened at a slower pace. Economy-wide, their maturing took hold already in the 2030 Framework. Similar levels of adaptability and long-term thinking were only realized in the Fit For 55 Car Regulation in 2022.

Therefore, the assessment confirms the expectation that sectoral climate legislation will be more shortsighted than economy-wide climate legislation. Further research on the drivers of shortsightedness can shed light on the difference. Previous studies suggest that not only the presence of an organized and powerful industry lobby can lower legislation’s ambition, but that also their ties and entry-points to the political system need to be taken into account⁶². Furthermore, shifting public opinion on the car industry due to, for instance, the Dieselgate scandal that uncovered large-scale cheating of emission tests by carmakers, can impact the car industry’s influence on policymakers⁶³. Additionally, the car industry’s interests have not always been internally aligned either²⁰. Regarding the 2014 Car Regulation, there was a divide between carmakers of predominantly smaller cars that wanted tighter standards and carmakers of bigger cars that wanted laxer ones. As such, more factors than only the influence of the car industry may be at play when it comes to the Car Regulations’ shortsightedness.

Furthermore, the farsighted 2035 standard of the Fit For 55 Regulation seems to suggest that the car sector’s shortsightedness has been mitigated, and that the EU strongly put the needs of the future first. However, many carmakers have announced their own phase-out dates for the sales of internal combustion engine vehicles, even before the Commission made its Fit For 55 proposal, after they invested heavily in electric vehicle technology⁴⁶. Hence, a farsighted 2035 standard might still be in their self-interest as this would increase the sales of EVs. It raises the question whether the farsighted standard can be contributed to a decrease in the car industry’s influence on the legislation, or to a shift in the car industry’s interests. Additionally, demand and modal shift measures could increase the car sector’s contribution beyond improving vehicle efficiency³. Research into the shortsightedness of those measures and how they have evolved over time could hence complement this study.