Emissions Trading Shake-Up: What You Need to Know About the 2025 Update

The UK government is making waves with a new amendment aimed at tackling vehicle emissions. The Vehicle Emissions Trading Schemes (Amendment) Order of 2025 is set to make significant changes to how car manufacturers meet their CO2 emission targets. Here's a breakdown of what this means for manufacturers, consumers, and the environment.

What’s Happening?

The new amendment modifies previous orders from 2023 and 2024, which saved aspects of the EU's Regulation (EU) 2019/631 for setting CO2 emission targets for new cars and vans in the UK. The crux of the change? Manufacturers will now be able to choose between using UK or EU values to determine their specific CO2 targets, selecting whichever is more advantageous.

Why the Change?

Initially, the Department for Transport (DfT) decided to use EU values for calculating emissions targets. However, a discrepancy arose when it was found that the original regulation's wording only allowed for UK values. This new amendment bridges that gap, giving manufacturers more flexibility and ensuring they aren't unfairly penalized due to a technicality.

The Bigger Picture

The 2025 update is an interim fix, targeting the compliance years 2021-2024. Looking forward, the 2023 and 2024 Orders will take full effect, replacing the EU’s CO2 reduction obligations with new UK-specific rules.

Impact on the Industry

The amendment is largely seen as a fair move by stakeholders, as evidenced by a consultation that gathered over 600 responses. The decision to allow a choice between UK and EU-derived targets is expected to level the playing field for manufacturers.

Environmental Considerations

While the update addresses immediate discrepancies, it may lead to a slight increase in CO2 emissions from new petrol or diesel vehicles in the short term. However, the 2023 Order remains a key component in the UK's long-term strategy to cut carbon emissions significantly by 2050.

What's Next?

The government has committed to updating its guidance to reflect these changes by October 2025, ensuring that all stakeholders are well-informed ahead of the trading window opening in November 2025.

Final Thoughts

While the amendment might seem like a technical fix, it underscores the UK’s commitment to fair and effective environmental regulation. As the country continues its journey toward decarbonisation, these adjustments ensure that no one is left behind due to administrative oversights. Keep an eye on the official government sites for the latest updates and guidance.