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

Since the 1990s, the European Union (EU) has reduced greenhouse gas emissions through a comprehensive climate and energy acquis, but it is not on track to do its fair share to limit warming in line with the Paris Agreement. The European Green Deal introduced the objectives of net-zero emissions by 2050 and a 55% reduction by 2030, requiring greater efforts across all sectors. Transport emissions have risen (except in 2020), making sectoral contributions critical. Despite extensive scholarship on EU economy-wide instruments (ETS, Renewable Energy, LULUCF), less attention has been paid to the ambition and sufficiency of sectoral legislation such as the Energy Performance of Buildings Directive and, crucially, the CO2 emission performance standards for new passenger cars. The paper addresses this gap by asking to what extent the 2009, 2014, 2019, and Fit For 55 car CO2 standards align with economy-wide goals and thus exhibit farsightedness. Drawing on literature on political shortsightedness, sectoral rules that impose concentrated costs on organized interests—like the car industry—are expected to be more shortsighted than economy-wide laws. The car sector, being both highly polluting and politically powerful, provides an instructive case. The study applies and refines a shortsightedness framework to assess consistency with long-term goals, stringency, adaptability, and long-term thinking, thereby illuminating mechanisms of shortsightedness in EU climate decision-making.

The paper situates itself within three strands of literature: (1) EU climate and energy policy design and implementation, which has focused on economy-wide frameworks like the ETS Directive, Renewable Energy Directive, and LULUCF Regulation, with relatively little on the ambition of sectoral laws; (2) political myopia/shortsightedness, which theorizes that policymakers discount long-term benefits when short-term costs are high, especially when costs are borne by concentrated, organized interests, leading sectoral legislation to be more shortsighted than economy-wide measures; and (3) EU transport policy and the political economy of the car sector, where studies document the car industry’s influence through lobbying, narratives, and policymaking roles, and analyze design issues in EU car CO2 standards and officials’ mitigation perspectives. Prior work shows organized industry opposition can lower ambition; discrepancies in test procedures (NEDC) created large gaps between reported and real-world emissions; and sectoral targets often lag economy-wide ambition. However, comparative assessments of shortsightedness across policy areas and over time remain rare—this study addresses that by applying a structured framework to the car regulations.

The study applies a shortsightedness framework (Gheuens and Oberthür) to evaluate the policy output of EU car CO2 standards across four dimensions: (1) consistency of standards with overarching long-term goals; (2) stringency; (3) adaptability; and (4) presence of long-term thinking. The focus is on policy intensity (content) rather than policy density (number of measures). Data sources include adopted legislation, European Commission proposals and impact assessments, European Parliament reports/resolutions, Council positions, and related institutional documents, analyzed via qualitative content analysis. Sector-specific refinements include: defining the long-term goals for passenger cars relative to economy-wide EU targets and transport-sector mitigation potential; and emphasizing monitoring/reporting and test-procedure representativeness (given known lab-to-road gaps).

• Consistency assessment: Two reference scenarios are used. A baseline scenario reflects existing-policy measures (using prior car standards as baseline where applicable). An ideal scenario derives from contemporaneous mitigation scenarios aligned with economy-wide targets and transport-sector potentials, calibrated to year 2000, with attention to linear or front-loaded reduction pathways. For interim years, linear interpolation from economy-wide pathways is employed. The analysis also accounts for flexibilities: (a) those that do not alter nominal targets but can prevent overachievement (e.g., pooling), and (b) those that lower or delay effective reductions (e.g., phase-ins, super-credits, special vehicle categories). The latter are the focus because they increase inconsistency.
• Stringency assessment: Based on legal status, nature of obligations (substantive/procedural), prescriptiveness/precision of objectives, and monitoring/reporting provisions, with particular attention to the alignment of lab test values with real-world emissions. The transition from NEDC to WLTP (and possible future PEMS) is central because unrepresentative tests render fines and obligations largely symbolic.
• Adaptability assessment: Presence of regularly scheduled reviews/revisions, explicit upward progression, and references to best available science guiding updates. Directionality matters to complement stringency (avoiding watering down while enabling ratcheting up).
• Long-term thinking: Presence and definition of long-term objectives for cars, references to scientific bases or related strategies, and specification of mitigation pathways linking interim and long-term goals. Positions of the Commission, Parliament, and Council are examined alongside final texts to gauge intent and understanding of the long term.

• Consistency with long-term goals: • 2009 Regulation: Targets of 130 g CO2/km (2012) and 95 g/km (2020). Closed the gap to the ideal scenario by ~68% (2012) and ~75–81% (2020). Flexibilities (phase-in to 2015, super-credits) increased inconsistency; super-credits led to underestimation of manufacturers’ average emissions. • 2014 Regulation (interim modalities): Extended the 2020 phase-in to 2021 and super-credits to 2023 (with caps). Estimates indicate the effective 2020 outcome closer to 100–108 g/km rather than 95 g/km due to flexibilities. • 2019 Regulation: Reduction targets relative to 2021 baseline: −15% by 2025 and −37.5% by 2030. Using NEDC-equivalent estimates for comparability, this corresponds to ~80.8 g/km (2025) and ~59.4 g/km (2030). Closed the baseline-to-ideal gap by ~46–56% (2025) and ~65–90% (2030). Flexibilities were reduced (no phase-ins; super-credits replaced by ZLEV benchmarks), but exceeding ZLEV benchmarks weakens a manufacturer’s reduction target. • Fit For 55 revision: Set −55% by 2030 (vs 2021) and 100% by 2035. Against the updated 55% economy-wide 2030 target, ideal car standards would be ~25 g/km by 2025 and 0 g/km by 2030. Because the 2025 car target was not revised, shortsightedness increased (0% progress toward the updated ideal for 2025). The 2030 revision made only limited additional progress (around 28% toward ideal). The 2035 zero-emission standard aligns with economy-wide net-zero by 2050 (100% progress). Some Member States announced earlier (2030) phase-out dates.
• Stringency: • All Regulations are legally binding with fines for exceedances (from 2019 onward: €95 per g CO2/km per new car as the standard fixed rate). Obligations include substantive standards and procedural monitoring/reporting. • A major weakness in 2009/2014 was the use of NEDC test procedures, which underestimated real-world emissions by up to 30–40%, rendering stringency largely symbolic and overstating emission reductions. • 2019 introduced WLTP from 2021 (more representative; potential future use of PEMS after 2030). However, precision suffered because 2025/2030 targets were defined relative to an uncertain 2021 baseline, creating incentives to inflate 2021 test values, thereby weakening later targets. Fit For 55 maintained this structure while enhancing monitoring of the lab-to-road gap.
• Adaptability: • Early reviews (2009, 2014) did not include revising standards and were ad hoc, focusing on modalities/non-essential elements; no explicit upward ratchet or specified scientific basis. • 2019 and Fit For 55 incorporated reviews of the standards and referenced Paris Agreement/net-zero, with Fit For 55 adding regular two-year progress reports and reviews. Scientific criteria guiding revisions, however, remained vague.
• Long-term thinking: • 2009 and 2014 lacked explicit long-term objectives or sector-specific pathways (2011 transport strategy’s 60% by 2050 target was below economy-wide 80–95%). • 2019 referenced the Paris Agreement, IPCC, and EU 2050 goals but still lacked a concrete long-term car objective or pathway beyond 2030. • Fit For 55 more explicitly referenced a 90% transport emission reduction by 2050 and the need for economy-wide negative emissions after 2050, with the Parliament pushing stronger long-term framing. Nonetheless, a clear car-specific long-term pathway remained absent. Overall, stricter standards did not automatically deliver greater farsightedness; near-term targets lagged economy-wide ambition and were weakened by flexibilities and test-procedure gaps. The 2035 phase-out aligns with net-zero by 2050, but contributions to the 2030 target remain limited.

Findings show that EU car CO2 Regulations have generally been inconsistent with economy-wide mitigation targets, and that increases in nominal ambition at the economy-wide level were not matched sectorally. Flexibilities (phase-ins, super-credits, ZLEV benchmark-induced weakening) and unrepresentative testing (NEDC) produced ‘on paper’ reductions and symbolic stringency in 2009/2014, widening the gap between calculated and real-world emissions. Although 2019 improved test representativeness (WLTP) and narrowed flexibilities, precision declined due to the relative-baseline approach for 2025/2030, potentially weakening actual effort. Adaptability improved only gradually; earlier, more structured reviews might have enabled a quicker transition to WLTP and timely tightening of standards. Long-term thinking was largely absent until the EGD, and even then, sector-specific long-term objectives and pathways for cars were not concretely embedded. The Fit For 55 Regulation made an important long-term step with the 2035 zero-emission standard (consistent with net-zero by 2050), yet it contributed relatively little to closing the 2030 ambition gap, implying that other sectors must compensate in the near term and that the car sector must accelerate after 2030. These results support theoretical expectations that sectoral legislation imposing costs on organized interests tends to be more shortsighted than economy-wide frameworks. Potential drivers include the car industry’s lobbying power and institutional access, evolving public sentiment (e.g., post-Dieselgate), and intra-industry divergence. Strengthening regular reviews, specifying science-based criteria, closing remaining test gaps (including potential PEMS use), tightening or removing weakening flexibilities, and adding interim milestones could realign sectoral trajectories with economy-wide goals and deepen near-term contributions.

The paper applies and refines a shortsightedness framework to a sectoral case—EU car CO2 emission performance standards—demonstrating that sectoral legislation can be more shortsighted than economy-wide policy and that shortsightedness evolves over time. It finds that while the 2035 zero-emission standard under Fit For 55 is aligned with the EU’s net-zero by 2050 objective, earlier regulations were inconsistent with economy-wide goals, weakened by flexibilities and unrepresentative testing, and lacked robust long-term thinking. Adaptability mechanisms have improved incrementally, with Fit For 55 introducing more regular reviews, but clearer science-based guidance and structured pathways are still needed. Future research should probe the drivers behind shifts in shortsightedness (e.g., changes in industry influence versus industry interests), assess the shortsightedness of demand- and modal-shift measures beyond vehicle efficiency, and explore how tighter interim targets and improved monitoring can accelerate near-term sectoral contributions.

• Scope: The analysis focuses on the EU’s car CO2 performance standards (policy intensity) and does not comprehensively assess other measures affecting car-sector emissions (e.g., spatial planning, demand reduction, modal shift, fuel decarbonization), which may alter overall sectoral trajectories.
• Data and measurement: For cross-time comparability, some assessments use NEDC-equivalent values even though WLTP values are higher and more representative; precise WLTP baselines for 2021 were uncertain during 2019 design, creating imprecision in 2025/2030 targets. The lab-to-road gap, though reduced under WLTP, persists and may affect realized versus reported outcomes.
• Reference benchmarking: Consistency is judged relative to economy-wide targets deemed a minimum level of farsightedness; truly science-aligned sectoral ambition would need to exceed these, implying that measured shortsightedness is conservative.
• Regulatory coverage: The 2014 Regulation is analyzed to a limited degree due to its nature as an interim modalities regulation.
• Process focus: The framework primarily evaluates policy outputs; while actors’ positions are reviewed, the policy process and causal mechanisms of influence (e.g., lobbying dynamics) are not systematically analyzed.