Integrating Renewable Fuels into CO₂ Standards for Passenger Cars and Light Commercial Vehicles
The 30 signatories reaffirm their support for the objectives of the Paris Agreement and for achieving climate neutrality in the European Union (EU) by 2050. Reaching this goal will require decisive action to decarbonise road transport, supported by regulatory improvements that foster innovation and unlock new investments in clean technologies. CO₂ standards for passenger cars and light-duty vehicles (LDV), the Renewable Energy Directive (RED) and ETS II are key instruments in this regard.
The signatories support a technologically neutral approach, in which electric mobility represents the main pathway for decarbonising LDVs. For this reason, we call for greater flexibility in the review of CO₂ performance standards. Alongside electric mobility, renewable fuels will play an essential role in meeting climate targets. Consequently, their contribution must also be integrated into emissions standards, together with the role of technologies such as plug-in hybrid electric vehicles (PHEV) and range-extended electric vehicles (EREV).
As part of the upcoming review of CO₂ standards for LDVs, we jointly request the following adjustments:
1. Equal treatment for new and existing vehicles
Climate policy must apply to all vehicles. While CO₂ fleet regulations focus solely on new vehicles, the Renewable Energy Directive covers fuels used in both new and existing vehicles. To unlock their full potential and encourage investment across the entire value chain, the use of renewable fuels must also be recognised in new vehicles. Restricting their use to the existing fleet would weaken investment incentives. Effective decarbonisation will only be possible if renewable fuels are equally accepted in both new and already circulating vehicles.
2. Introduce a Carbon Correction Factor (CCF)
Under the current fleet regulation, internal combustion engine vehicles are considered to run 100% on fossil fuels, regardless of the actual fuel used. This approach does not reflect reality, as the European fuel mix is not entirely fossil. According to the EU SHARES database, the share of renewable fuels exceeded 5% in 2022.
The CCF should incorporate this real proportion and systematically reflect the actual CO₂ reductions delivered by renewable fuels. This would enable the regulation to more accurately represent real progress in the fuels sector and make the contribution of renewable energy to climate protection visible.
In practice, this would mean that the official CO₂ value of a vehicle would be reduced based on the share of renewable fuels according to SHARES data. For example, with a 5% share of renewable fuels, a vehicle emitting 100 g/km would be counted as 95 g/km.
3. Recognise as zero-emission vehicles those running exclusively on renewable fuels
Vehicles operating solely on renewable fuels should be recognised as zero-emission vehicles, in the same way as battery-electric and hydrogen vehicles. Taxation and other charges applicable to these vehicles should also be aligned with those of electric vehicles.
It is essential that these vehicles can reach the market immediately after the regulatory review and before 2030. There is no objective basis to delay their entry until 2035. On the contrary, early market access would accelerate investments in production, infrastructure, vehicle development and renewable fuel manufacturing, providing long-term demand certainty.
4. Legally define what constitutes a renewable fuel
A European, binding and harmonised legal definition is needed. In general terms, all fuels eligible under the RED should fall under the category of “renewable fuels”. The following definition, aligned with the RED, is proposed for inclusion in the CO₂ regulation:
“‘Renewable fuel’ means any fuel defined under Renewable Energy Directive (EU) 2018/2001, provided it meets the sustainability criteria of that Directive and its associated delegated acts, and whose production process captures the same amount of CO₂ from biomass, ambient air or recycled carbon sources as is released during its combustion.”
This concept includes renewable and/or synthetic fuels: biofuels, biogas, biomass fuels, renewable liquid and gaseous fuels of non-biological origin (RFNBO), and recycled carbon fuels (RCF).
A clear definition will provide legal and investment certainty for producers, operators and users, and will serve as a basis for planning, certification and accounting within the CO₂ framework for LDVs.
5. Gradually strengthen CO₂ reduction requirements for renewable fuels
The minimum emissions reduction required for renewable fuels must increase continuously and realistically. The upcoming fleet regulation review should include a recital indicating that the future RED IV and its associated rules will set a long-term pathway for new production plants, without undermining investments already made, defining progressive emission-reduction levels.
Concrete implementation should then be incorporated into the RED revision. This evolution will rely on technical and economic assessments, providing planning and investment certainty across the value chain and supporting the expansion of renewable fuels.
Conclusion
An effective EU climate policy requires technology-neutral instruments and incentive-based regulatory frameworks. The proposals outlined above form the long-term vision needed to scale up renewable fuels in road transport, strengthening investment, innovation and industrial capacity.
The signatory associations urge the European Commission to legally and promptly integrate renewable fuels into the CO₂ regulation for LDVs as part of the upcoming review. Only then will Europe be able to meet its climate objectives efficiently, economically and in a socially responsible manner.
