Methodology

England, Wales and Scotland have a zero emissions vehicle mandate which came into force in 2024 (from 2025 the scheme will be UK-wide). There are two mandates: one for cars, one for vans. There is a target for carmakers to ensure that they have enough ZEV mandate certificates to cover 22% of their car sales and 10% of their van sales in 2024. Certificates are primarily earned by selling zero emissions cars or vans. But they can also be earned in other ways that do not involve the sale of an additional zero emissions vehicle. When a certificate is earned this way, it has the effect of reducing the ‘real world’ zero emissions vehicle sales target that the manufacturer must meet. For example, a carmaker sells 100 cars in a year, they could meet their 22% target by selling 22 ZEVs. However, if they earned two certificates through one of the other methods available, their ‘real’ ZEV sales target would fall from 22% to 20%.

We quantify the impact of one of the flexibilities, namely the ability to convert over-performance with CO2 intensity targets. We only calculate the impact of this flexibility because it is almost certain that any carmaker would avail themselves of it, since not to use it would be to forego a ready source of valuable credits that would disappear in time. Other flexibilities may be used by the carmakers, but these depend more on the decisions and strategies that carmakers pursue and data is not available on these.