Carpooling took off in the 1970s as a way to save on gas and reduce planet-warming pollution, and the practice is still common for both reasons.

However, as the Guardian reports, a major automaker has turned the concept on its head in a very corporate fashion by joining forces with an up-and-coming electric vehicle manufacturer to exploit a regulatory loophole.

What's happening?

According to the global investment group IIGCC, the European Union set yearly "fleet-wide CO2 emissions targets" for newly registered vehicles in the EU in 2022.

Effective Jan. 1, 2025, regulations stipulated that newly registered vehicles "must emit 15% less" carbon dioxide than targets set for 2022. By 2030, that percentage will rise to 55% for passenger cars and 50% for vans, and by 2035, 100%.

In February, Reuters reported that Chinese EV manufacturer BYD was "in talks" with several major automakers. 

Although BYD was tight-lipped, the EV maker sought to help "them avoid hefty European Union fines on 2025 emissions" by selling carbon credits and pooling emissions.

Nissan faced EU fines of £13 billion ($17.3 billion) for failing to hit 2025 emissions targets in the EU.

On Oct. 21, Electrive reported that Nissan — the automaker with the largest emissions shortfall in 2025 — had partnered with BYD to offset its 2025 emissions. 

Why is this concerning?

As IrishEVs pointed out, emission pooling arrangements "artificially bring down" an automaker's emissions on paper, while not actually reducing pollution in any meaningful way.

This "demonstrates the extent to which so many manufacturers have disregarded their emissions obligations," the outlet added. In that respect, the practice is arguably greenwashing.

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Fredrik Eklund, who manages credit trading for the EV brand Polestar, explained that emissions pooling risked slowing EV adoption in Europe.

Emissions pooling arrangements risk "delaying the transition from legacy cars to EVs," Eklund began, according to the Guardian.  

"We are already seeing car manufacturers pushing at the 2027 expiry date, but from our point of view and from the point of view of society, we really don't want to delay this," he explained.

As Eklund observed, meeting standards on paper or playing a shell game with zero-emissions carmakers proverbially kicks the can down the road, impeding EV adoption.

What's being done about it?

IrishEVs noted that while the practice wasn't "illegal," it did nothing to combat air pollution or rising temperatures.

Moreover, the Guardian reported that automakers had set their sights on loosening EU 2035 emissions targets rather than working to meet them.

In addition to supporting big brands' eco-friendly actions, contacting lawmakers to demand compliance can help hold major corporations responsible for exploiting loopholes like these.

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