Drivers have been warned of new emission rules that may be launched next year, which could impact all vehicles and how they are taxed.
The warning comes after reports found that the Department for Transport is looking at updating the emission rules for UK vehicles to match European regulations.
In the EU, the upgraded Euro 6e-bis standard came into force on January 1, 2025, specifically impacting all hybrid vehicles, requiring them to have tougher emission testing.
From the start date, all new vehicles in Europe will be forced to undergo more stringent testing methods to ensure their emission levels are more accurately reported, with hybrid vehicles facing stricter testing for the first time.
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The DfT is expected to launch a consultation into introducing Euro 6e emissions for vehicles in the UK
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As Europe begins taking its emission standards more seriously, the UK is set to follow, with the DfT expected to launch a consultation on whether to adopt the new measures Euro 6e-bis.
If the UK goes ahead with its plan, employers who offer plug-in hybrid electric vehicles as company cars could see their tax levels skyrocket.
Salary sacrifice schemes enable drivers to secure a vehicle through their employer while paying less taxes with the catch that the vehicle needs to emit 75g/km of CO2 or less.
However, if stricter emissions tests for hybrid cars are introduced, this could more than double current CO2 values for some cars, which risks pushing them above the Benefit-in-Kind threshold.
The DfT is believed to be planning to launch a consultation later this year on matching UK standards with European ones by introducing the Euro 6e-bis emission rates, which would apply to all new vehicles from 2026.
The current emission standard for cars and vans in Great Britain is Euro 6d, which came into force in January 2022. All new cars must also pass a real-world emissions test called the Real Driving Emissions.
In London, under Ulez rules, petrol cars are required to meet at least Euro 4 emission standards and Euro 6 standards for diesel vehicles to avoid facing the daily £12.50 charge.
Harvey Perkins, a tax specialist at HRUX, told Fleet News: "It’s not dissimilar to issues we’ve had in the past, when we went from NEDC to WLTP, and then when we had the step between the calculated WLTP and the measured WLTP. Both those times, there was quite a lot of disruption in the industry, because people need to know what the CO2 numbers are and at this point, it’s not very clear."
"The implication is that towards the latter end of this calendar year, we will see CO2 values differing on the certificate of conformity from what maybe you expected when you ordered the vehicle.
"If it goes over 50g/km, then you will move on the tax table, so you will have to pay more company car tax. The big issue is if you go over 75g/km, because if you go over 75g/km, salary sacrifice no longer applies to that vehicle. You can still use it, but you won’t get the national insurance benefits of salary sacrifice."
The DfT shared examples of potential CO2 increases with one hybrid vehicle, which has a current CO2 figure of 10g/km and an equivalent all-electric range of 80km (50 miles), increasing to 30g/km.
In another example, the authority explained how a hybrid car with a current CO2 figure of 10g/km and an equivalent all electric range of 120km (75 miles) could increase to 40g/km, under the new emission standards while a hybrid with a current CO2 figure of 30g/km and equivalent all electric range of 40km (25 miles) could increase to 60g/km.
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Diesel vehicles are currently subject to Euro 6 emission rules
PAIn the final example, the DfT shared how a hybrid with a current CO2 figure of 30g/km and equivalent all-electric range of 80km (50 miles) could see emissions increase to 90g/km under the new testing.
Last year, the European Parliament voted in new standards for exhaust emissions, called Euro 7, across Europe. The new standards incorporate a whole new set of regulations, including ones for electric vehicles, and are expected to come into effect in 2026.
