Euro 6e-bis, what is it, and how could it affect company car drivers and vehicle choice?

Euro 6e-bis is an enhancement of the current Euro 6 emissions regime — specifically in how emissions are measured, particularly for plug-in hybrid electric vehicles (PHEVs).

It does not change the pollutant limits themselves, but it updates the testing protocols to make emissions figures more reflective of real-world driving.

The main changes include a longer test cycle for PHEVs, a revised “Utility Factor” that reflects how often PHEVs are actually driven in electric mode, and stricter requirements for on-board diagnostics and in-service conformity.

The practical effect is that many PHEVs will end up with higher official CO₂ ratings than before, reducing the tax advantages they have traditionally enjoyed.

Why and When It Is Coming into Force in the UK

The EU and Northern Ireland baseline:

In the EU, Euro 6e and its amendments have already come into force. The enhanced Euro 6e-bis applies from January 2025 for new vehicle types and from January 2026 for all new vehicles. Northern Ireland, which still follows EU vehicle approval rules, is aligned with this timetable.

The UK (Great Britain) context:

In Great Britain, the current requirement remains Euro 6d-ISC-FCM. Euro 6e-bis is not yet formally recognised under the GB Type Approval system. However, the UK government has signalled its intention to introduce Euro 6e-bis from April 2026 for all new car and van registrations.

To cushion the impact, ministers have proposed a temporary easement in Benefit-in-Kind (BIK) taxation, which would run from April 2026 to April 2028. This is designed to soften the jump in tax charges for company car drivers as PHEV CO₂ figures rise.

The details are still subject to consultation, but businesses should plan on the assumption that Euro 6e-bis will be part of UK law from spring 2026

What It Potentially Means for Company Car Drivers and Vehicle Choices

Impact on CO₂ figures and BIK tax bands:

For company car drivers, the most obvious effect will be higher official CO₂ figures for PHEVs, which means higher BIK taxation.

Many PHEVs that currently sit comfortably below the 50 g/km threshold may find themselves reassessed at nearly double that level. This can mean BIK rates rising from single digits into the twenties or even higher percentages, dramatically increasing tax bills.

Narrowing of PHEV choices:

Because some PHEVs may no longer be viable options under the new test, the choice of models available to employees could shrink. Fleets may simply stop offering certain PHEVs if they fall into unfavourable tax brackets or fail to meet internal emissions thresholds.

This narrowing of options is likely to accelerate the shift towards fully electric vehicles (BEVs), which remain the most tax-efficient choice for company drivers.

Total cost of ownership shifts:

As lease costs, depreciation assumptions and tax liabilities all adjust, the total cost of ownership for PHEVs will rise.

The financial case that once favoured PHEVs over petrol or diesel vehicles may erode, particularly once transitional easements expire. BEVs are likely to become more attractive both from a tax and TCO perspective.

Transitional relief and grandfathering:

The government’s proposed easement from April 2026 to April 2028 will cushion some of the tax impact, and vehicles registered before the deadline may retain their earlier, more favourable ratings.

However, these reliefs are temporary. Over time, fleets and drivers will need to adapt to the stricter regime.

What Companies Can Do to Mitigate or Reduce the Impact

Conduct a fleet emissions audit:

Companies should assess the current CO₂ ratings of their PHEVs and model how these might change under Euro 6e-bis. This helps forecast future BIK liabilities and provides an early warning of which vehicles will no longer be cost-effective.

Reevaluate car policy and eligibility criteria:

It may be necessary to tighten emissions thresholds in company car policies, reduce the range of PHEVs on offer, or shift the emphasis towards BEVs.

Policies should be updated to reflect not just upfront costs but total cost of ownership, including employee tax liabilities.

Engage with manufacturers and leasing providers:

Work with manufacturers and leasing partners like nev leasing to obtain projected Euro 6e-bis figures for vehicles under consideration.

Lease terms may also need more flexibility to avoid being locked into unfavourable tax positions mid-contract.

Promote better driver behaviour:

Encourage employees with PHEVs to maximise electric driving by keeping their vehicles charged. Training on efficient driving habits can also reduce real-world emissions, even if the official test figures are less favourable.

Phase in replacement strategy carefully:

Plan vehicle replacements in line with the 2026 deadline. Ordering before the new rules apply may lock in lower CO₂ ratings for a time, but over the longer term fleets will need to adapt to BEVs or highly efficient alternatives.

Monitor government consultation:

Stay close to the ongoing consultation process and be prepared to adapt to finalised rules.

Industry groups and fleet associations can also be used to lobby for fair and workable implementation.

Conclusion

Euro 6e-bis is not about new emission limits but about more realistic testing. For PHEVs, that means higher official CO₂ figures, higher company car tax, and in many cases less fleet viability.

The UK plans to adopt Euro 6e-bis for new vehicles from April 2026, with a short-term easement to soften the blow.

For fleets and businesses, the key is preparation: auditing current cars, forecasting tax impacts, updating car policies, and leaning more heavily into electric vehicles.

By acting now, companies can reduce the financial shock for both themselves and their drivers, and ensure a smoother transition when the new rules take effect.