Cars and Vans

Countries and regions making notable progress in reducing the emissions of cars and vans include:

• In 2023, the European Union adopted stricter CO₂ emission standards for cars and vans to ensure carbon neutrality by 2050, as part of the “Fit for 55“ package. In addition, low-emission zones (areas that charge fees on or otherwise restrict the operations of high-emitting vehicles) are becoming more prevalent in the region, which could potentially incentivise the adoption of electric vehicles (EVs) in the future.
• In the United States, in March 2024, the Environmental Protection Agency (EPA) signed the final rulemaking for the “Multi-Pollutant Emissions Standards for Model Years 2027 and Later Light-Duty and Medium Duty Vehicles”. These standards target a nearly 50% reduction in fleet average GHG emissions levels for model year (MY) 2032 vehicles compared to the existing MY 2026 standards for light-duty vehicles and a 44% reduction for medium-duty vehicles.
• In China, the government implemented in April 2024 a car trade-in policy to subsidize the replacement of used fossil fuel-powered vehicles with new energy or fuel-efficient vehicles.
• At the beginning of 2024, a zero emission vehicle mandate came into force in the United Kingdom. By 2030, 80% of new cars and 70% of new vans sold will be zero emission, increasing to 100% by 2035.
• In May 2024, the Parliament of Australia enacted the New Vehicle Efficiency Standard Act 2024, aiming to reduce emissions from new cars and vans by about 60% and 50%, respectively, by 2029 compared to 2024 levels. The Government also announced the country’s first National Electric Vehicle Strategy in 2023, aiming to reduce emissions and make EVs more affordable. 
  

In 2023, total CO₂ emissions from cars and vans amounted to 3.8 Gt, accounting for more than 60% of the road transport sector emissions. The global stock share of electric light-duty vehicles reached 3%, avoiding around 850 kb/d (1 600 GJ) of oil use in the year 2023 alone. Despite record-high levels of electrification, the total CO₂ emissions of cars and vans in 2023 reverted to 2019 pre-pandemic levels. This increase was primarily caused by the growing population and rising incomes in countries and regions such as China, India and Southeast Asia. These economic trends led the global light-duty vehicle fleet to grow by 20 million, which contributed to a more than 2% increase in total CO₂ emissions for a second year in a row.

Emissions from light-duty vehicles will need to fall by around 6% each year through 2030 to get on track with the NZE Scenario. Rapid electrification, accompanied by increasing fuel efficiency in conventional cars, are key for ensuring carbon neutrality over the long term. Policies such as tax credits for EVs, “feebate” schemes, and targeted incentives or fleet requirements for the purchase of EVs with high utilisation rates (such as taxis or postal fleets, or urban delivery vehicles) could support this effort. 

Between 2000 and 2015, the average annual reduction in specific fuel consumption (measured in litres of gasoline equivalent per 100 km [lge/100 km]) was 1.4%, thanks to improvements in conventional engines and hybridisation. However, improvements slowed to 0.8% per year between 2015 and 2019, as technical improvements were counteracted by rapidly increasing vehicle power and weight, and the growth in sales shares of SUVs. Between 2019 and 2022, rapid electrification outpaced the effects of increasing car size, resulting in a 10% decrease in the fuel economy of new light-duty vehicle sales globally compared to 2019 levels.

Among developed economies, the United States and Canada have the least fuel-efficient cars and vans, largely as a result of the high and growing share of pick-ups and SUVs in those markets. Conversely, the European Union and Japan all have very fuel-efficient cars and vans, mainly due higher fuel price levels, consumer preferences and policies that have incentivised the purchase of smaller personal vehicles (such as France’s bonus-malus programme – a revenue-neutral scheme which taxes cars with high fuel consumption, and uses the revenues collected to subsidise the purchase of fuel efficient cars – and Japan’s exemption of the small “Kei” cars from the “garage certificate”, a proof-of-parking requirement).

To get on track with the NZE Scenario pathway, the average reduction in specific fuel consumption will need be around 8% per year globally to 2030, largely through rapidly increasing sales of conventional hybrids and zero-emission vehicles.

In 2023, sport utility vehicles (SUVs) and pick-up trucks accounted for about 50% of global car sales, with noticeable growth in the United States, India and Europe. The combustion-related CO₂ emissions of SUVs increased by nearly 100 million tonnes in 2023. Altogether, the 360 million SUVs on the road today emit about 1 billion tonnes of CO₂.

A shift to smaller vehicles will be required to get on track with the NZE Scenario, alongside an overall decline in car and van activity to reduce future CO₂ emissions. A variety of policies can incentivise an “avoid and shift” approach, such as integrated urban and transport planning, increased public funding and public-private financing of public transport (e.g. rail and bus) infrastructure and operations and transport demand management.

In 2023, the market share of electric light-duty vehicles (including battery electric and plug-in hybrid vehicles) reached more than 15% of total light-duty vehicle sales at a global level. To align with the NZE Scenario pathway, about two-thirds of new light-duty vehicle sales will need to be electric by 2030.

In countries where electromobility is more advanced, there is a shift in focus from subsidising private EVs towards supporting the development of charging infrastructure. In 2023, about 1.2 million public chargers were installed, reaching a global total of roughly 4 million.

To ensure continuing market uptake of electric light-duty vehicles in line with NZE targets, this number would need to increase by four-fold by the end of this decade.

Between 2022 and 2023, an increasing number of countries proposed policies to accelerate the transition to electric cars.

In the European Union, the regulation mandating zero tailpipe CO₂ emissions for new cars and vans sold from 2035 onwards has been fully approved and entered into force May 2023. Euro 7, a new emission standard applicable to all cars and vans, has also been adopted by the European Commission. It will ensure that emission testing conditions are more representative of real life, including increasing the scope to cover particle emissions from tyres and brakes, extending the compliance period for in-use vehicles, and regulating EV battery durability. In addition, a proposal to add a separate  Emissions Trading System (ETS) that would include road transport emissions has been formulated.

In August 2022 the United States launched the IRA, which provides tax credits for domestically manufactured EVs under the Clean Vehicle Tax Credits (see the Global EV Outlook for more information). Additionally, in March 2024, the Environmental Protection Agency (EPA) signed the final rulemaking for the “Multi-Pollutant Emissions Standards for Model Years 2027 and Later Light-Duty and Medium Duty Vehicles”. These standards aim to achieve nearly 50% reduction in fleet average GHG emissions levels for model year (MY) 2032 vehicles compared to the existing MY 2026 standards for light-duty vehicles and a 44% reduction for medium-duty vehicles.

In the United Kingdom, a zero emission vehicle mandate came into force at the beginning of 2024. By 2030, 80% of new cars and 70% of new vans sold will be zero emission, increasing to 100% by 2035.

In May 2024, the Parliament of Australia enacted the New Vehicle Efficiency Standard Act 2024, aiming to reduce emissions from new cars and vans by about 60% and 50%, respectively, by 2029 compared to 2024 levels. The Government also announced the country’s first National Electric Vehicle Strategy in 2023, aiming to reduce emissions and make EVs more affordable.

In addition, large and growing car markets such as Indonesia and India, where electric car uptake has been limited to date, are increasingly introducing policies such as tax exemptions for electric cars, equipment and parts, alongside purchase incentives and deployment targets.

Technical and financial assistance to Emerging Market and Developing Economies to accelerate the transition to electric mobility is ramping up. One prominent example of such efforts is UNEP’s Global Electric Mobility Programme, in which assistance is being delivered at sub-national, national, and regional level to over 50 countries, 27 of which are being funded by the Global Environment Facility (GEF-7) partnership to accelerate electric mobility.