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The Japanese carmaker Nissan is to team up with its Chinese electric vehicle rival BYD in an attempt to offset their carbon emissions and avoid EU penalties for 2025, it has confirmed.

It is part of a wider offsetting scheme the EU has sanctioned for the car industry that could help manufacturers of combustion engine cars head off an estimated £13bn in fines.

Nissan said in a statement: “Nissan has formed a pool with BYD for its CO₂ fleet emissions in Europe for the 2025 calendar year. The scope of the agreement covers passenger vehicles within EU markets and will contribute to Nissan’s commitment towards zero emissions in a sustainable way, while continuing to support the EU’s 2050 decarbonisation target.”

It added that it had entered into the agreement to “ensure the business is better able to comply with EU regulations and continue the transition towards our own goal of zero emissions”.

Chinese exports of EVs to the EU are already posing an existential crisis to the European car industry but are now, like Tesla, helping traditional car firms meet their decarbonisation targets courtesy of an EU regulation that in effect allows car firms to “pool” emissions.

The EU has already extended the period for compliance with emissions rules from one year to three years, fuelling fears this will further delay the already slow take-up of EVs in the EU, particularly in southern Europe, but also in key states such as France and Germany.

Fredrik Eklund, responsible for carbon credits trading at the Chinese-owned Swedish brand Polestar, which only makes electric vehicles, said: “It risks delaying the transition from legacy cars to EVs. 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.”

Under the rules, car manufacturers have to meet emissions targets of 93.6g of CO₂ per kilometre.

But under the car pooling arrangement, car manufacturers can pay electric car companies to use their zero emissions record to average out the pollution from sales of their combustion engine cars to avoid fines.

The industry in the past has said the 2025 emissions targets could have led to as much as €15bn (£13.03bn) in fines.

The latest car pooling agreement, confirmed by Nissan, mirrors that of other companies who have teamed up with other big name electric car brands including Tesla and Polestar.

Polestar has a pooling arrangement with Mercedes-Benz, Volvo and Smart cars, while Tesla’s zero emissions record is being mopped up by Toyota, Ford, Mazda, Alfa Romeo and Suzuki.

The price car companies are paying EV firms to offset their emissions remains confidential. But in January it was reported that carbon credit sales accounted for almost 3% of Tesla’s $72bn (£54bn) total revenue in the first nine months of last year – just over £1.6bn.

The car industry is now fighting for a softening of the EU’s 2035 target for banning the sale of new combustion engine cars, arguing that the public is still not prepared to make the switch in sufficient numbers, citing lack of infrastructure in southern and central Europe as part of the problem.