What is the Euro 6e-bis easement?
The Euro 6e-bis easement is a temporary government measure in the UK (April 2026 to April 2028) to mitigate the impact of the new, more stringent Euro 6e-bis emissions testing standard on plug-in hybrid (PHEV) company car tax (Benefit-in-Kind, or BiK). The new standard, effective from April 2026 for new registrations, will result in higher official CO₂ ratings for PHEVs, leading to potentially significant increases in BiK rates for drivers.
The easement aims to soften these tax hikes by introducing a transition period, with retrospective application to Northern Ireland from January 2025 to ensure UK-wide consistency.
What is the Euro 6e-bis Standard?
It's an enhancement to the Euro 6 emissions standard, specifically targeting PHEVs.
The new standard involves more rigorous real-world emissions (RDE) testing, covering a wider range of conditions. This update aims to close the gap between lab-based emissions results and actual real-world driving conditions, ensuring more accurate reporting of CO₂ emissions.
A new, more realistic Utility Factor (UF) is now applied to emissions tests. The UF determines the balance between electric and combustion engine usage during testing, and the update is designed to better reflect how plug-in hybrid vehicles (PHEVs) are actually driven in real-world conditions.
In addition, the simulated driving distance for emissions testing will rise from 497 miles to 1,367 miles. This longer test cycle is intended to provide more accurate and reliable data by evaluating vehicle performance over a greater range of driving scenarios.
These adjustments are expected to result in higher official CO₂ emissions values for plug-in hybrid electric vehicles. Early test results have already shown a general increase in CO₂ output across these extended test distances.
Why is the Easement Needed?
The Euro 6e-bis standard is expected to cause official CO₂ ratings for PHEVs to rise considerably. Higher CO₂ figures directly feed into the Benefit-in-Kind (BiK) tax calculation, meaning drivers could see their company car tax bills increase sharply.
For example, a vehicle currently rated at 10g/km CO₂ could see its rating jump to 30–40g/km under the new standard. That shift could push the BiK rate from 9% to as high as 24%, resulting in drivers paying substantially more each month for the same vehicle.
How Will the Easement Work?
The easement will apply across the UK and run from April 2026 to April 2028, with retrospective application in Northern Ireland from January 2025 to ensure consistency.
During this two-year transition period, the policy is designed to help to soften the increase in BiK rates for drivers of PHEVs as company cars. Instead of an immediate jump in tax costs, the easement provides fleets and drivers with time to adjust to the new Euro 6e-bis emissions standard and plan future vehicle choices more effectively.
What Does This Mean for Fleets and Drivers?
For fleets and company car drivers, the timing of vehicle registrations will be critical. Any plug-in hybrid registered before April 2026 will continue to benefit from the existing, lower emissions ratings and therefore lower Benefit-in-Kind (BiK) tax rates. However, vehicles registered after the new Euro 6e-bis standard takes effect could face sharply higher official CO₂ figures, pushing them into more expensive tax bands.
This shift means higher future costs for many drivers and employers. Without the government’s temporary easement, some PHEV models could see BiK rates more than double, significantly increasing the cost of running these vehicles as company cars.
The key for fleet managers will be preparation. Reviewing upcoming vehicle orders, adjusting procurement timelines, and reassessing fleet policies will help businesses remain cost-effective and compliant. By acting early, both fleets and drivers can minimise exposure to higher tax bills and ensure their vehicle choices remain financially sustainable.
