Vehicles do not only emit CO2 but a number of other pollutants. Depending on whether you opt for a petrol or diesel engine, and the size of it, the amount and type of pollutants they are heaviest in will vary.
Although the market is turning towards electric and hybrid models we know that these aren’t always the right choice for your business and you might go for a petrol or diesel model in some circumstances.
When choosing a vehicle that has a traditional combustion engine, you'll need to think about its CO2 emissions. To help you understand CO2 emissions and their importance in making fleet decisions we’ve put together the below guide.
What are CO2 emissions?
CO2 is a gas in the Earth’s atmosphere, which occurs naturally and can also be emitted as a pollutant by a number of different human activities.
Natural levels of CO2 emissions are balanced out in the Earth’s ecosystem through natural processes like trees and plants absorbing the gas through their photosynthesis processes to avoid them damaging to the planet. However, human activities have seen a massive increase in the level of CO2 emissions causing problems for the atmosphere and they continue to do so, which is why many countries, companies and individuals strive to reduce these emissions. The burning of fossil fuels, including in combustion engine vehicles, is the main contributor.
What causes CO2 emissions?
CO2 emissions can be produced in a number of ways but in vehicles they are caused by the burning of fossil fuels, petrol or diesel, in order to create the power needed to move the vehicle.
Other vehicle emissions
CO2 emission measurement
Vehicle emissions are heavily regulated to ensure they're producing as low levels as possible to reduce the impact drivers have on the environment.
CO2 is measured by its weight in grams, and when looking at a vehicle’s emission levels this is measured in terms of the grams emitted over a set distance. This is usually grams per kilometre and so you’ll see g/km when looking at the emission values of vehicles with a combustion engine.
Under modern UK regulations, the baseline fleet-wide target for manufacturer tailpipe emissions sits at 93.6 g/km. More significantly, the UK operates under a strict Zero Emission Vehicle (ZEV) Mandate, which legally requires 33% of all new cars and 24% of all new vans sold in 2026 to be completely zero-emission (0 g/km).
WLTP testing
The main form of testing new cars in the UK for their emission levels is with World Harmonized Light-Duty Vehicle Test Procedure (WLTP) testing.
This method replaced previous NEDC testing, which there were concerns about the results not reflecting real world driving conditions and so provided inaccurate emission levels. It’s also a measurement that is designed to be used by manufacturers around the world to give a more uniform and comparable measurement internationally.
In WLTP testing, vehicles undergo a dynamic 30-minute cycle covering 23.23 km to simulate real-world driving conditions across four speed phases (low, medium, high, and extra-high) and a mix of urban and non-urban environments.
WLTP tests also take into account any additional options added to the vehicle and the impact they will have on the CO2 emissions.
RDE testing
The Real Driving Emissions (RDE) testing measures toxic pollutants from the vehicle, and does so on public roads rather than in simulated laboratory conditions. RDE ratings are issued alongside WLTP laboratory testing. While the RDE test records data to verify test validity and real-world fuel consumption, a vehicle's official tax brackets are legally bound to the figures generated during the strict WLTP laboratory cycle.
Euro 6
The Euro 6 is a later revision of the Euro 1 EU vehicle emissions target.
Like the RDE testing Euro 6 measures the other pollutants a vehicle emits including: carbon monoxide, nitric oxide, nitrogen oxide, hydrocarbons and particulate matter like soot.
How to calculate CO2 emissions
It can be difficult to calculate the emissions your fleet is producing, especially if there are a number of vehicles in the fleet.
You can use the government's website to calculate the emission levels of particular vehicles so that you can see whether they are damaging to the environment and need upgrading in order to reduce your business' overall CO2 emissions.
CO2 tax implications
The amount you pay in first-year road tax (Vehicle Excise Duty) is based directly on the amount of CO2 the vehicle emits, meaning the lower the CO2 emissions, the lower your upfront tax bill. Additionally, any diesel company cars that do not meet strict RDE2 compliance standards face higher first-year VED bands and are hit with an extra 4% Benefit-in-Kind (BiK) tax surcharge.
For any vehicles in your fleet that are leased, the funder handles the physical payment of the road tax, as they are the legal owners. However, fleet managers must still factor this into budgeting; standard lease agreements dictate that any mid-contract VED rate increases legislated by the Chancellor will be directly invoiced to your business.
Keep in mind that as of recent rule changes, even electric cars and vans are no longer exempt from standard annual road tax rates. Another reason you’ll want to encourage your drivers to adopt lower-emitting vehicles is that the company car tax rates (BiK) your employees pay are heavily based on the CO2 emissions of the car. Opting for ultra-low emission or electric vehicles dramatically lowers personal tax liabilities for your workforce.
We’ve got a more extensive breakdown of how this will affect the amount you pay here.
CO2 and MOT testing
If any of your fleet is over three years old it will need to have an MOT completed annually. During the MOT the vehicle will also be tested for emissions and if they do not meet the required levels then it will fail its MOT. Testing for new cars is done using a meter to get accurate readings.
CO2 and low emission zones
Across the country we have seen towns and cities follow London’s lead and implement low emission zones (LEZs) and clean air zones (CAZs) where there are restrictions on the vehicles that can enter them or those that do not meet set emission standards may have to pay a charge.
The RAC have this useful map that shows all the clear air schemes across the UK if you are concerned about whether there is a clean air zone in your area.
How will CO2 emissions affect our fleet decisions?
The tax implications of first-year VED mean that purchasing high-emission vehicles outright will heavily penalise your capital expenditure (CapEx) budgets. For both you and your drivers, lower-CO2 models offer significantly lower company car tax, making clear communication of these tax links vital during driver vehicle allocation. Opting for low or zero-emission models is also the single most effective way to compress your business's corporate carbon footprint.
Top five tips to reduce CO2 emissions
There are several things that you and your drivers can do to help reduce vehicle CO2 emissions. We’ve rounded up our top five tips that are easy for any driver to do:
1. Keep up to date with the vehicle servicing
2. Remove any roof and bike racks when not in use
3. Drive carefully and avoid harsh acceleration and braking
4. Don’t sit with the engine running
5. Regularly check the tyre pressure and keep at the optimum level
What's the future for CO2 Emissions?
The UK government has reinstated the phase-out timeline, implementing a strict ban on the sale of new purely petrol and diesel cars from 2030. To aid transition, certain low-emission hybrid cars and petrol/diesel vans will remain legal to purchase new until 2035, after which all new car and van sales must be 100% zero-emission.To enforce this pathway, the 2026 ZEV Mandate legally dictates that 33% of a manufacturer's new car sales this year must be fully electric, scaling up heavily as the decade progresses. While historical plug-in purchase grants have been reduced, structural support frameworks like workplace charging infrastructure grants remain available to help businesses adapt before the 2030 deadlines hit.
When the time comes to upgrade any of the vehicles in your fleet you might also want to consider an electric or hybrid model. We know that this might not always be the right choice for your business or that particular vehicle need and you can call on 01722 322 888 and we would be happy to discuss your business needs and what fuel type would work best for you.