The transportation sector accounts for around a quarter of global CO2 emissions and is powered predominantly by fossil-derived fuels. The regulatory framework is evolving globally to more stringent requirements for fuel efficiency and CO2 emissions, forcing the OEMs to adopt advanced powertrain technologies. Such changes are more evident in the light-duty road transportation sector compared to the heavy-duty road, marine and air transportation sectors. Here, a holistic review of the current and prospective regulations targeted at curbing transportation-based CO2 emissions is presented. For road transport, these include various government- and state-level policy initiatives such as the Corporate Average Fuel Economy (CAFE) and CO2 emission standards and the zero emission mandates. For marine and aviation sectors, these include the International Maritime Organization (IMO) and the International Civil Aviation Organization (ICAO) regulations and aspirations targeted at reducing the CO2 footprint. The compliance options for these regulations are evaluated using a combination of fuels, engines, and hybridization in each transportation sector. Furthermore, a brief overview of how OEMs are working toward achieving these targets is presented. An overview of several advanced spark and compression ignition engine technologies with the potential to improve the fuel economy and CO2 emissions is presented. Finally, an overview of major disruptions that are changing the road-based transportation is presented and a balanced life cycle based policy approach is advocated.