CO₂ fleet balance 2025: Which car manufacturer needs to step up
Many manufacturer pools are within the target corridor for the billing period 2025 to 2027. Only Volkswagen is significantly missing the target mark.
The curse of good sales figures: At Volkswagen, too, combustion engines dominate sales. But the group has no choice. Without increased sales of electric cars, the fleet consumption targets cannot be met.
(Image: Florian Pillau / heise Medien)
- Christoph M. Schwarzer
In the Bible, Tohu wa-bohu is the chaotic primordial state of the world. God ordered the chaos with creation, as can be read there. If we consider the German and European debate on CO₂ fleet limits, this process is incomplete. On the contrary, a multitude of political positions form a cacophony. But where does the automotive industry really stand in reducing CO₂ emissions, and what changes in legislation are being discussed?
The starting point is the CO₂ fleet mechanism: the European Union, with an incidentally conservative majority in Parliament and Council, has decided that the average of new passenger cars actually registered in a calendar year in the European Economic Area is the basis for calculation. Owners can see the CO₂ value of their car in grams per kilometer in position V.7 of their vehicle registration document. Electric cars emit zero grams on the test bench and are attractive in terms of balance.
No fine of a cent so far
In the first accounting period from 2021 to 2024, the fleet, on average across manufacturers, was not allowed to exceed 95 g/km. Each manufacturer was given its limit, which was based on the average weight of the cars sold. This value is given according to the abolished “New European Driving Cycle” (NEDC); in today's “Worldwide Harmonized Light Vehicle Test Procedure” (WLTP), the converted figures are significantly higher.
(Image: ICCT)
If the limit is exceeded, a fine of 95 euros must be paid per gram and per vehicle sold in the EU in the reference year. For a mass manufacturer like Volkswagen, this could easily add up to several 100 million euros. However, so far, no one has had to pay a single cent. Pooling is part of the CO₂ fleet mechanism: manufacturers are allowed to team up as they wish for accounting purposes. If money flows between companies, the EU supports it because pioneers are rewarded economically and laggards are punished.
Flexibility for the years 2025 to 2027
In the current accounting period from 2025 to 2029, the limit has decreased by 15 percent compared to the previous period. Actually, the limit must be met every year. However, as a concession to the interests of the automotive industry, the so-called flexibility (often also used in English: Averaging) has been introduced, following the example of Great Britain: it is sufficient if a manufacturer meets the limit in its pool on average for the years 2025 to 2027. This can lead to sales campaigns with high discounts for electric cars at the end of the accounting period. In addition, there is a weighting factor that has been reversed with the current accounting period: producers of a heavier vehicle fleet must meet lower limits than those of lighter passenger cars. The range extends from 90 g CO₂/km (Volvo) to 99 g CO₂/km (Suzuki).
Currently seven grams overrun
According to a new analysis by the International Council on Clean Transportation (ICCT), which examined the first three quarters of 2025, the average target limit according to WLTP across all manufacturers is 92 g CO₂/km. As mentioned, each manufacturer has an individual limit. The average actual value of the automotive industry is 99 g CO₂/km, i.e., seven grams more than allowed. Formally, penalty payments would soon be due; due to averaging, this does not happen, and it will remain so if the limit is met on average for the years 2025 to 2027.
(Image: ICCT)
Manufacturers are free to choose the technical means by which they meet the CO₂ fleet limits. Toyota, for example, has so far managed to meet the requirements with almost no electric cars: fuel consumption and, consequently, CO₂ emissions are decreasing due to the high proportion of hybrid powertrains in sales. Nevertheless, electric cars are the most cost-effective method for radically reducing CO₂ values, as they are included in the balance sheet with zero grams. In this way, passenger cars with combustion engines and high fuel consumption can still be sold in the medium term. In addition, plug-in hybrids typically have low values of under 50 g CO₂/km—at least on paper.
Nissan with BYD and BMW below the limit
Results after three quarters of 2025: Only the pools of BYD and Nissan, and that of BMW and Mini, are meeting their weight-related limit for 2025 to 2027. The merger of Mercedes with the Geely brands Volvo, Polestar, and Smart is close to a perfect score with a deviation of two grams upwards. It is very likely that this consortium will get through without a penalty.