Overview

• Both the European Parliament and member states have ratified the new rules, which will be published in the EU Official Journal and take effect 20 days later.
• Carmakers will no longer face annual compliance deadlines and instead have three years to meet fleetwide CO2 emission limits.
• Companies that exceed limits in one year can avoid fines by overcompensating with lower emissions in the subsequent two-year span.
• The revision aims to relieve pressure on manufacturers grappling with slower EV adoption and intensified competition from subsidized Chinese imports and U.S. tariffs.
• CO2 targets are based on each manufacturer’s average emissions across all vehicles sold in the EU, with penalties applying only to net exceedances after offsetting.