If Europe eases CO2 limits for electric cars, it faces a 28‑billion‑euro annual fossil‑fuel bill; Italy alone would lose 36 billion euros

Brussels – Weakening carbon dioxide (CO2) emission standards for cars is not just an environmental issue, but a threat to energy security and the pockets of European citizens. According to a new study by German think-tank Fraunhofer ISI, for Transport & Environment (T&E), the drop in electric car registrations that would result from a downward revision of emission limits, which T&E has estimated at around 49 million fewer electric vehicles in the EU by 2040, would result in approximately 28 billion euros more spent on fossil fuels each year. 

The slowdown in the transition to electric vehicles risks costing Italy and Europe dearly: fewer electric vehicles would mean not only billions more spent on fossil fuels and new backup power plants, but also lower investment in renewables, resulting in an overall more expensive and less efficient energy system by 2040. 

At the heart of the matter is Vehicle-to-Grid (V2G) technology, which transforms electric cars into “batteries on wheels” capable of feeding energy back into the grid at peak times. If current regulations were to be weakened in line with the demands of manufacturers’ association ACEA and the European Parliament’s rapporteur for the revision of the regulation, Massimiliano Salini (Forza Italia), “the role of electric vehicles as the main distributed storage resource would be reduced by 35 per cent,” eliminating a resource which, on its own, could provide storage equivalent to Belgium’s annual electricity consumption.

 For Italy, the consequences would be particularly severe. Widespread use of V2G could reduce the need for stationary storage systems by up to 72 GW, resulting in investment savings of up to 36 billion euros. Conversely, a slowdown in the transition would force our country to spend an additional 4.7 billion euros each year on fossil fuel purchases.

In general, with lower carbon dioxide emission standards and without the necessary mobile battery storage capacity, Europe would have to make up the shortfall across various sectors. Firstly, it would be forced to build around 150 new reserve power stations (peaker plants) to manage peak demand, covering a 13 GW capacity shortfall that would persist until 2040. In addition, the EU would have to cut investment in photovoltaics, with a projected 37 per cent drop in new solar installations, as producing energy that cannot be stored would become less cost-effective.

Fewer electric vehicles, higher costs for everyone: the weakening of the energy transition risks costing the system billions. The decline in Vehicle-to-Grid (V2G) potential reduces expected savings by 34 per cent, while, with carbon limits remaining unchanged, annual benefits of 11.7 billion euros could be achieved by 2040, compared with just 7.7 billion euros in a more permissive scenario. The final bill is even higher: weakened standards would result in around 25 billion euros in additional costs, driven by liquid fuel expenditure approaching 27.9 billion euros, which clearly outweighs the economic benefits of V2G.

“Italy, which in 2025 spent over 50 billion euros on energy resources, cannot afford to slow down the transition,” said Esther Marchetti, Clean Transport Manager at T&E Italia, pointing out that the transport sector still relies on fossil fuels for over 90 per cent of its energy needs. The Transport and Environment organisation urges the EU not only to maintain its emissions targets, but to introduce a requirement for bidirectional chargers for all new vehicles by 2032, to ensure that this “energy reserve” can actually be utilised.