Carbon dioxide emissions from road transport account for around one-quarter of the UK's total greenhouse gas emissions. Government regulations have progressively tightened CO2 limits for new vehicles, culminating in the 2024 Zero Emission Vehicle (ZEV) mandate that requires increasing proportions of new car sales to be zero-emission. Understanding these regulations helps you make informed purchasing decisions and anticipate future obligations. ## The Zero Emission Vehicle Mandate The ZEV mandate, introduced in January 2024, requires that a growing percentage of new cars and vans sold in the UK must produce zero tailpipe emissions. For 2026, the requirement stands at 28% of new car registrations, rising to 80% by 2030 and 100% by 2035. Vehicle manufacturers face financial penalties if they fail to meet their annual ZEV sales targets. The penalty is £18,000 per vehicle below the required threshold. However, manufacturers can pool their credits by trading with competitors, allowing brands with strong EV sales to support those struggling to meet targets. The mandate applies only to new car sales, not to the existing vehicle fleet. Your current petrol or diesel car remains perfectly legal to own and drive regardless of these regulations. However, it affects the availability and pricing of new vehicles, as manufacturers prioritise producing zero-emission models to meet their obligations. ## Current CO2 Emission Standards All new cars sold in the UK must comply with Euro 6e emissions standards. Under Euro 6e, there is no specific CO2 limit for individual vehicles, but manufacturers must meet fleet-average CO2 targets across all their new car sales. The fleet average CO2 target for the overall UK new car market is 130g/km, down from 140g/km under the previous NEDC test cycle. However, this figure is calculated under WLTP conditions, and real-world CO2 emissions are typically 20-30% higher. Euro 7 standards introduce more stringent requirements for 2026, including limits on particle number emissions from all vehicles, not just diesel. The Euro 7 standard also addresses real-world driving emissions more rigorously, closing loopholes that allowed manufacturers to optimise vehicles specifically for the WLTP test. ## CO2-Based Vehicle Excise Duty Vehicle Excise Duty in the UK is directly tied to CO2 emissions for new cars. First-year rates range from £0 for zero-emission vehicles to £2,605 for vehicles exceeding 255g/km of CO2. After the first year, the standard rate applies. As of 2026, petrol and diesel cars pay £195 per year, while zero-emission vehicles are fully exempt from VED. This creates a significant ongoing tax advantage for electric vehicle owners. Vehicles with a list price above £40,000 pay an additional premium rate of £410 per year for five years from the second registration anniversary. This supplement applies to all vehicles regardless of fuel type, though it has been abolished for zero-emission vehicles since April 2025. ## Company Car Tax and CO2 Company car tax is calculated based on the vehicle's CO2 emissions and its list price. The benefit-in-kind (BIK) value is expressed as a percentage of the list price, ranging from 2% for zero-emission vehicles to 37% for high-emission vehicles. For 2026-27, the BIK percentages are: - Zero emission vehicles: 2% - 1-50g/km (electric range > 130 miles): 2% - 51-75g/km (electric range 70-129 miles): 5% - 76-94g/km: 15% - 95-99g/km: 16% - 100-104g/km: 17% - Above 104g/km: 18-37% (increasing with emissions) These rates create a substantial tax advantage for electric company cars. An executive choosing a £60,000 electric company car pays BIK tax on just £1,200 per year at the 2% rate, compared to £22,200 per year for the same value petrol car at 37%. ## The Phase-Out of Internal Combustion Engines The government's plan calls for new petrol and diesel car sales to end by 2030. After this date, all new cars sold must be zero-emission. By 2035, all new vans must also be zero-emission. This does not mean petrol and diesel cars will disappear from UK roads. The existing fleet will continue to operate, and privately owned internal combustion engine vehicles will remain legal. The phase-out targets only affect new vehicle sales. The practical impact of this timeline is already visible in showrooms. Every major manufacturer now offers electric models, and many have announced plans to phase out combustion engine development entirely. SUV and performance brands that once relied on large petrol engines are investing heavily in electric alternatives. ## Implications for Car Buyers For new car buyers, the ZEV mandate and tightening CO2 regulations mean electric and hybrid options are increasingly mainstream. Battery electric vehicles offer zero road tax, no Congestion Charge in London, exemption from Clean Air Zone fees, and very low per-mile fuel costs. However, higher upfront prices for EVs compared to equivalent petrol models mean the total cost of ownership comparison depends heavily on annual mileage and how long you keep the vehicle. Company car drivers typically benefit most from EV choice due to the favourable BIK rates. For those buying used cars, regulations affecting new vehicle availability will gradually shift the used market. As manufacturers produce fewer petrol and diesel models, good examples of these vehicles may become scarcer and potentially more valuable as collector's items over the coming decades. ## Frequently Asked Questions **Can I still buy a new petrol car after 2030?** No. The government ban prevents the sale of new petrol and diesel cars from 2030. However, used petrol and diesel cars will remain available from dealers and private sellers. **Will I need to scrap my diesel car?** No. The regulations apply only to new vehicle sales. Your existing petrol or diesel car remains legal regardless of age. You will only face restrictions if driving into Clean Air Zones, which are city-specific and depend on your vehicle's emissions standard. **Do classic cars have exemptions from CO2 regulations?** Classic cars over 40 years old are exempt from vehicle excise duty but remain subject to the same emissions standards when driven. Some older vehicles may qualify for historic vehicle exemptions from certain Clean Air Zone charges depending on the specific zone rules. **How do CO2 limits affect car insurance?** CO2 emissions and vehicle regulations do not directly affect insurance premiums. However, electric vehicles can sometimes attract lower premiums because they have fewer mechanical failure points, and insurers increasingly offer discounts for EVs.