New fuel consumption report counters ‘unaffordable’ claims for cleaner cars

Cars sold in Europe are getting more fuel-efficient and also cheaper, thereby countering industry claims that obligatory fuel efficiency standards would put cars out of reach of buyers. That is the main message of T&E’s 2011 report into progress made by Europe’s car makers on reducing carbon dioxide emissions. The report confirms that Fiat, Toyota and Peugeot-Citroën remain the makers whose cars emit less CO2.

T&E’s report ‘How Clean are Europe’s cars’ broke new ground when it was first published in 2006, as it separated car makers’ individual efforts to cut CO2 from the overall industry average. The report has been published every year since, normally focusing on which car makers are doing best and which worst. But this year the issue of price has taken on added importance, as trends are now becoming clear following the adoption of the EU’s first obligatory fuel consumption standards in 2008.

According to the 2011 report, the average car sold in Europe last year was 4% more fuel efficient, emitted 4% less CO2 and was 2.5% cheaper in real terms than a year earlier. In terms of the overall industry average, CO2 emissions from new cars dropped to the milestone figure of 140 g/km, which was the target for 2008 under the controversial voluntary agreement from the late 1990s. However like-for-like retail prices have not increased since legally-binding CO2 targets were introduced, as the car industry predicted, but have fallen every year in real terms. Studies based on industry cost estimates for reaching the 140g CO2/km milestone consistently claimed that retail prices would increase significantly as a result.

The T&E report examined two cost estimates carried out for the European Commission in 2001 and 2006 that were based on data supplied by the car industry. The earlier report predicted that reaching 140g/km would cause the retail price of the average new car to increase by €2400, the later study said €1200. But in contrast, like-for-like retail prices actually fell across Europe by 2.4% a year, on average, since legally binding targets for car CO2 were first announced in 2007.

T&E director Jos Dings said: ‘The car industry has consistently resisted fuel efficiency regulations by complaining that cars would become “unaffordable”. But car emissions have now dropped to 140g CO2/km and that simply hasn’t happened; prices have actually fallen in real terms. Clearly the EU needs to learn lessons from this. When it comes to future targets to improve fuel efficiency, industry cost estimates should be taken with an SUV-sized pinch of salt.’

In terms of manufacturers, Volvo achieved the biggest fleet-wide reduction between 2009 and 2010 but is second only to Daimler as the worst overall CO2 emitter. Fiat is the best of the car makers for CO2 emissions with a fleet average of 126 g/km, with Toyota and Peugeot-Citroën not far behind with 130g and 131g. In terms of countries, Slovakia was the worst performing nation with an increase of 1.3%, while Germany, which is Europe’s largest car market, made the second-worst progress with a cut of just 1.8% averaged across sales of 2.8 million vehicles.

US and Japan take action

Barack Obama has announced new standards aimed at cutting fuel consumption for American cars by about a sixth by 2025. The standards are aimed at achieving an average fuel consumption rate of 54.5 miles per gallon (equivalent to 101g of CO2 per kilometre), up from its current average of 24mpg (230 g/km), but analysis by the International Council on Clean Transportation suggests that, after correcting for test cycle and vehicle size, the standards could be equivalent to 70 g/km depending on other factors.

Last year Obama set new standards for SUVs and light trucks that effectively meant a 5% reduction per year up to 2016, when the national average is supposed to be 35.5mpg (157 g/km).

Meanwhile Japan says it wants to set a 24.1% improvement in average CO2 emissions between 2009 and 2020, which would lead to 20.3 kilometres per litre (equivalent to 116 g/km) in 2020. Like the USA and Europe, Japan wants to set fuel economy targets averaged across a car maker’s entire fleet.