State of European Transport

The EU faces fierce competition to be a global leader in the cleantech industries of the future. Our climate, competitiveness, jobs and economic wellbeing are at stake. 

The Green Deal is Europe’s roadmap to deliver for the climate and future security and prosperity. Yet, as another global crisis highlights the danger of Europe’s dependence on imported oil, the Green Deal is under attack within Europe.

Critics say Europe cannot compete with China on cleantech, but Europe is performing better than we realise and if we accelerate the transition now we can catch China in the near future.

Transport remains Europe’s biggest climate problem. In 2025 transport emissions in the EU flatlined, with emissions from cars plateauing and increased emissions from aviation undermining a drop in shipping emissions.

Countries with high EV sales like Denmark and the Netherlands are seeing strong cuts in vehicle carbon pollution. This is offset by emissions growth in countries like Spain where EV sales remain far too low.

While car emissions are stalled by laggard countries, the elephant in the room is the growth in aviation emissions which cancel out gains elsewhere and jeopardise Europe’s successes.

Almost all carbon emissions in EU transport are caused by burning oil. Europe remains dependent on imported oil and the subsequent oil shocks during global crises.

In 2025 alone, Europe spent over €220 billion euros on imported oil. With prices of $100 a barrel, we will burn over €300 billion worth of it this year.

Europe remains one of the largest emitters globally, and transport plays an outsized role in European carbon emissions.

The rise of Chinese emissions in electricity generation and industry have seen an astounding level of growth.

While transport plays a smaller overall role in China’s emissions, it is a growing problem. Despite EV sales significantly higher than other countries or regions, charging an EV in China is far dirtier than in Europe

China’s transport emissions may already be flatlining. This is largely because they make up 60% of the the global EV market.

China is going full speed ahead on cleantech and electrification. 

Chinese companies are building 60% of the battery electric cars sold around the world. And their battery production is 20 times that of Europe.

Europe is competing far better than it realises. While the gap in BEV sales with China is growing, Europe is only 3 years behind and if it maintains its current ambition will soon catch up. 

Until 2021, the EU kept pace with China, but weak CO₂ standards have allowed China to race ahead. In 2025, China had 8.5 million sales, a share of 31%. This compares to 2 million vehicles at 19% in Europe. 

Despite Tesla helping kickstart the global EV race, the US lags behind and is not expected to reach BEV sales over 25% by 2030.

In its critical home market, European carmakers’ EV sales are booming, thanks to lower prices and more options for consumers. 71% EVs sold in the EU last year were European, driven by compliance with cars CO₂ standards. This compares to 64% of Plug-in hybrid vehicles being made in the EU and 17% made in China.

The production and export of vehicles is a big source of GDP for the EU. China has edged ahead in global sales, but the EU currently exports cars to the value of €150 bln while China’s exports are worth €100 billion. The US is now an isolated market.

European car makers can use their dominance at home as a springboard to sell EVs in foreign markets. The transition to EVs is a global shift, not one limited to China.

Europe’s battery industry is also transforming. What’s emerging is the kind of diverse battery industry the EU needs, with European and Chinese companies adding to the existing (mostly) South Korean capacity.

To make sure these nascent gigafactories and critical processing plants have a chance to survive and compete globally, the Industrial Accelerator Act (IAA) needs to support home grown cells and packs.

Europe will likely always trail China in battery manufacturing. However, with the right policies and financing, Europe has enormous potential to grow one of the critical 21st century industries.

While China has been dominating sales of battery electric trucks, Europe is still in the race. In the US, electric truck sales have fallen off a cliff.

Three EU countries are matching or outperforming China. They are showing the rest of the EU what is possible.

Sustainable Aviation Fuels (SAFs) are expected to play a key role in decarbonising aviation. Europe now accounts for more than half of the world’s announced e-kerosene production capacity. Of the 64 large-scale projects announced worldwide, 41 are in Europe.

Orders for battery-electric ships - newbuilds and retrofits - have increased markedly in number and size in recent years.

EU regulation is helping us keep in the race. This happens at EU, country and city level. There are already 18 zero-emission freight zones in place in European cities, with at least 15 more planned, especially in Northern Europe.

The cost of inaction, for our economy, our security and our climate is shockingly high. Europe has been at the mercy of increasingly volatile fossil fuel prices in the last 20 years. We must reduce oil dependence and oil use as quickly as possible: for our own energy security and to maintain our climate leadership.

The good news is that the technology exists, the scale and the price reductions have been staggering. Europe must accelerate to an electrostate future and take advantage of clean, cheap, reliable energy that will insulate us from energy shocks in future.

Sources:

For EU GHG emissions, see our methodological note.

For the numbers at the top of the page, we used EV Volumes, Benchmark for gigafactory output, and Eurostat for oil dependency.