Plug-in hybrids (PHEVs) are facing potential changes in how CO2 figures are calculated in Europe, but the UK is taking steps to maintain their appeal to fleet buyers. The European Commission’s latest Euro 6e-bis emission standard includes adjustments that could result in higher CO2 figures for PHEVs, leading to tax hikes and a loss of incentives for fleet buyers.
The new standard, introduced in January 2025, includes a revised ‘utility factor’ for PHEVs that assumes a lower share of the vehicle’s mileage is driven on electric power. This change aims to provide a more accurate representation of CO2 emissions, based on real-world data showing that PHEVs emit more CO2 on the road than during official tests.
The International Council for Clean Transportation (ICCT) has warned that these adjustments could significantly increase PHEVs’ CO2 emissions ratings, impacting manufacturers’ ability to meet CO2 targets and affecting tax incentives for fleets. Currently, PHEVs emitting 50g/km CO2 or less qualify for lower company car tax bands and more generous relief from corporation tax.
To address these challenges, the UK government has announced plans for a two-year “easement” starting in April 2026. This will allow manufacturers to continue publishing CO2 figures based on the outgoing Euro 6d standard, providing a temporary solution to maintain the appeal of PHEVs to fleet buyers.
Overall, these changes highlight the importance of maintaining incentives for low-carbon vehicles like PHEVs in order to meet emissions targets and promote sustainable transportation. The UK’s proactive approach to supporting the uptake of PHEVs demonstrates a commitment to reducing carbon emissions and encouraging the transition to cleaner vehicles.
