Regulating and reporting CO₂ emissions of new cars and vans

CO₂ emissions from cars and vans newly registered in the UK were previously governed by European Union (EU) regulations.

Data was gathered each year on fleets across Europe, and manufacturers who failed to meet their CO₂ targets were fined.

DfT has now taken over the application and enforcement of CO₂ standards for GB-registered cars and vans, as of 1 January 2021.

New vehicle registrations data and targets

Under the GB regime, manufacturers are set GB-specific targets which are at least as ambitious as current EU CO₂ emissions targets. These targets are set on the basis of their GB vehicle registrations.

Compliance in GB is monitored and enforced by the Secretary of State for Transport. The Secretary of State for Transport records and verifies new GB registrations and notifies manufacturers of their level of compliance. This is initially done using provisional data.

Manufacturers then have 3 months to inform DfT about any anomalies within this data, as before.

After this period, DfT will notify manufacturers of the final data and issue any fines for not adhering to their target, known as an ‘excess emissions premium’. The excess emissions premium amount will be at the same rate as before.

Pooling GB registrations

Different manufacturers may come together to bring all, or some, of their registrations under one target. This is known as ‘pooling’. It is usually used by vehicle manufacturing groups to bring all their registrations under one target, although competing manufacturers may also form a pool if they so wish.

Manufacturers can still group together and pool their GB registrations but must provide DfT with certain information to do so.

Applying for derogations

Manufacturers can apply for a ‘derogation’ from the overall CO₂ target. Applying for this allows smaller manufacturers, who might not be able to reduce carbon emissions as quickly as their larger counterparts, to receive an adjusted target. This may allow these manufacturers to make the necessary reductions in a more proportional way.

Vehicle manufacturers registering below a certain level of new vehicle registrations per calendar year may apply for a derogation from the overall CO₂ target. Manufacturers seeking a derogation must apply to DfT and, subject to approval, may receive an adjusted CO₂ emissions target effective from that reporting period onwards.

Applying for credits for eco-innovations

Currently, new vehicle types undergo a standardised emissions test in order to determine the level of CO₂ emitted by the vehicle. Manufacturers and parts suppliers may however develop technologies that reduce emissions in the real-world, but that are not taken into account during this emissions test.

An example is the use of LED efficient lightbulbs. These technologies are known as ‘eco-innovations’.

Previously, manufacturers or parts suppliers had to apply to the European Commission to have these eco-innovations approved as CO₂ reducing technologies, and vehicle manufacturers then applied these technologies to the vehicle in return for CO₂ emissions ‘credits’.

Manufacturers or suppliers can apply for eco-innovation approvals for vehicle technologies that contribute towards CO₂ reductions but that are not part of CO₂ test procedures. Technologies that were previously approved as eco-innovations are still recognised as such by the DfT.

New technologies need to be approved separately by DfT. Manufacturers can continue to receive CO₂ emissions credits for the deployment of approved eco-innovations on their vehicles.

Registering vehicles in the UK, GB and EU

The regulations work on the basis of where the vehicle is registered for use, so any new cars or vans registered in GB after 1 January 2021 are covered by the GB-specific regulations, regardless of where they were manufactured. This is subject to falling within the scope of new car and van CO₂ regulations and meeting type-approval requirements.

The EU regulations covering car and van CO₂ emissions had previously been listed in Annex II to the Northern Ireland Protocol, therefore the domestic legislation was prepared on a GB-only basis.

On 17 December 2020, the UK Government and the EU agreed to remove these references from the Northern Ireland Protocol, allowing for Northern Ireland-registered vehicles to be regulated domestically, and to count toward domestic targets, rather than by the EU regulation.

Further information on how vehicles registered for use in Northern Ireland are to be regulated will be set out in due course.