Shift to gas guzzlers puts car CO2 emissions into reverse

The fuel consumption of cars sold to private motorists in the UK increased last year, according to statistics gathered by the Society of Motor Manufacturers and Traders.1 The trend spells further trouble for the Government’s climate change targets - and will fuel calls for regulatory action to replace the car industry’s EU-wide voluntary agreement on fuel efficiency.

Average carbon dioxide emissions from new cars sold in the UK fell from 189.9g/km in 1997 to 174.2g/km in 2002 as diesel vehicles took a higher market share, engines became more efficient and motorists switched towards smaller cars. The average annual rate of improvement over this period was 1.7%.

However, the rate of progress in the UK slipped to 1.2% in 2003 (ENDS Report 351, pp 10-11 ) - and to just 0.4% in 2004, according to the SMMT. Last year, average emissions from new cars stood at 171.4g/km.

Emissions from new vehicles in the UK are way off course against the EU-wide target of 140g/km by 2008/9, set by voluntary agreements between car manufacturers and the European Commission. Cars in the UK tend to be larger and less efficient than the European average - but progress at EU level is also stalling (ENDS Report 349, p 60 ).

Just 15.5% of new cars in the UK complied with the 140g/km target, up from 14.9% in 2003. To deliver the target in the UK, average fuel efficiency would need to improve by almost 8g/km in each of the next four years - a rate of improvement 11 times faster than that in 2004.

The Commission is coming under growing pressure from EU environment ministers and the European Parliament to replace the voluntary agreement with legally binding limits on car CO2 emissions. European environmental group T&E recently proposed allowing car manufacturers to trade emission rights - a system which would reward those companies which develop and market more fuel efficient vehicles.

The SMMT’s figures also spell serious trouble for the Government’s review of the climate change programme, which is due to be completed this summer.

The latest official energy projections show that on current policies, the UK’s CO2 emissions will fall by 14% between 1990 and 2010 - badly adrift from the Government’s 20% target (ENDS Report 358, p 25 ). However, this picture may be optimistic - the projections assume that the fuel efficiency of new cars will improve by 2.4% per year, six times greater than in 2004.

According to the SMMT, average emissions from new company cars - which accounted for 53% of sales - fell by 1% to 169g/km. The figure supports official claims that reforms of company car taxation have had a significant impact (ENDS Report 352, pp 12-13 ).

In contrast, average emissions from new private cars actually increased by 0.3% to 174.2g/km. One of the main reasons is the growing demand for people carriers, four-wheel drive vehicles and sports cars. These gas-guzzlers accounted for 14.8% of sales in 2004, up from 13% the year before. In contrast, after years of growth sales of super-minis fell slightly.

The CO2 figures would have been worse still had diesel vehicles not captured 32.5% of the market in 2004 - up from 27.3% in 2003 and 16.2% in 1997.

Sales of electric-petrol hybrids such as the Toyota Prius more than doubled - but still totalled less than 2,500 cars in 2004 (ENDS Report 328, p 33 ).

  • The financial community is showing an interest in how climate change policies could affect car manufacturers’ profitability.

    A 2003 report by Sustainable Asset Management and the World Resources Institute found that companies’ product ranges have widely different carbon intensity profiles (ENDS Report 346, p 22 ).

    In a follow-up report, SAM and the WRI estimate that meeting the 140g/km target in the EU could cost the industry some €5.6 billion.2

    The report points out that the car industry has never revealed how it has divided up responsibility for delivering the target - and claim that this is intended to hide the effect on the hardest-hit companies. BMW is the only manufacturer to disclose its strategies and supporting data.

    The lack of transparency creates "marked uncertainty" for investors, who should apply a higher risk factor to auto stocks, the researchers say.

    To tease out the possible impacts, the researchers modelled two extreme scenarios. In the first, each company’s fleet meets the 140g/km standard by 2008. This would most benefit companies that already have relatively fuel-efficient product ranges, such as Fiat, Peugeot-Citroen, Renault, General Motors, Nissan, Toyota and Honda (see figure).

    In the second scenario, a uniform percentage improvement of 15% is expected across all companies’ fleets by 2008. This would benefit companies with the least fuel-efficient fleets, such as BMW, Daimler-Chrysler, Ford, Volkswagen, and Hyundai.

    Overall, the researchers say that Toyota is best positioned, regardless of which approach the industry uses to meet the voluntary agreement. A significant share of the company’s new cars emit less than 120g/km, the Commission’s proposed target for 2012.

    However, BMW and Fiat could face widely differing costs under the two scenarios. They are also poorly positioned on hybrid and diesel technologies, which will be especially important in delivering improved efficiencies.

  • Related Environmental Services

    Powered by ENDS Directory

    Compliance Search

    Discover all ENDS content in one place, including legislation summaries to keep up to date with compliance deadlines

    Compliance Deadlines

    Plan ahead with our Calendar feature highlighting upcoming compliance deadlines

    News from ENDS Europe

    News from ENDS Waste & Bioenergy