How clean are Europe’s cars 2012

In previous years, we assessed how each carmaker was positioned to hit their mandatory CO2 standards that the European Union has set for 2015 (130 g/km on average).

This year, for the first time we focus on how carmakers are positioned to achieve the 95 g/km targets for 2020. The European Commission has recently proposed how carmakers will need to achieve this target, which is currently discussed in the European Parliament and the Council of Ministers.

The reason for this change of target year is twofold. Our previous reports have shown that 2015 targets are weak and carmakers are well on track towards compliance, even over-compliance, and this year’s report further underlines this conclusion. The reason they over-comply is partly because they are manipulating the test results to artificially lower the official data and partly because carmakers are planning for the stricter 2020 target. Loopholes in current tests must be closed and testing systems improved to avoid future abuses.

As we did in previous reports, we also assess progress per EU Member State.

In this year’s report, we included two additional pieces of analysis:

• A review of how official CO2 figures are translating into the ‘real world’;
• An analysis of the importance of lack of progress in reducing vehicle weight, and how progress in this area can be stimulated.

Main conclusions

Progress of Europe’s largest 15 carmakers in cutting CO2

• The industry as a whole reduced average CO2 emissions by 3.3% last year continuing the trend of much faster reductions since adoption of the EU’s mandatory CO2 targets for cars. The regulation is working. The industry reached an average CO2 emission of 136 g/km;
• Progress was more evenly spread across carmakers than before; Europe‘s six largest carmakers by sales all reduced CO2 by between 2 and 6%. BMW, Mazda and Honda were negative outliers, with decreases in emissions of between just 1 and 2%;
• The top four in terms of fleet-average CO2 emissions remains unchanged. Fiat leads with 119 g/km, followed by Toyota, PSA and Renault. Daimler remains last on the list, but reduced CO2 in 2011 by 4.6%, one of the best improvements recorded.

Progress towards 2015 target (average 130 g/km)

• The industry as a whole is now less than 4% away from hitting its 130 g/km target for 2015; last year it still had a 7% gap to close;
• Toyota, PSA and Fiat have reached their 2015 target with four years to spare. Mazda is now furthest away with a 12% gap yet to close;
• The distance-to-target figures do not allow for loopholes such as ‘eco-innovations’, ‘supercredits’ and provisions for carmakers below 300,000 sales. Carmakers are therefore even closer to meeting targets than these figures suggest. These flexibilities are not needed for carmakers to achieve their targets and just reduce the CO2 improvement and worsen average fuel economy.

The headline conclusion of last year’s report therefore remains unchanged: all available evidence points towards carmakers in Europe heading for very significant ‘over-compliance’ with the CO2 regulation and most are hence likely to hit the 130 g/km CO2 target for 2015 several years in advance.

Progress towards 2020 target (average 95 g/km)

• Maintaining the average rate of progress achieved in the past four years is more than sufficient for the industry as a whole to hit the 95 g/km target for 2020;
• European carmakers are well placed for hitting 2020 targets. In the ranking of best placed manufacturers, all European manufacturers (except Daimler) are in the top 9. The bottom 6 largely consists of Asian manufacturers;
• The list of distance-to-target for 2015 is similar to the list for 2020; the proposal to achieve 95 g/km hence does not change the distribution of efforts required. The data excludes flexibilities in the regulation that depending upon the detail of the final agreement could make compliance significantly easier.

Progress in real-world driving

• Evidence is emerging that reductions in official CO2 and fuel consumption figures do not necessarily translate in similar reductions in the real world;
• A recent report, analysing 28,000 fuel consumption data generated by German car users, for the first time quantifies this phenomenon. It suggests that German users do not experience about half of the reduction in ‘official’ fuel consumption of new cars that was realised in the 2006-2010 period. Of the promised lifetime fuel savings of €2,600 per car, only about €1,300 has really materialised;
• The only realistic explanation is that carmakers go at ever greater lengths to ‘optimise’ their test vehicles for the official fuel consumption test. We intend to publish further research into the detailed explanations for this phenomenon.

Lack of progress in reducing vehicle weight (average 95 g/km)

• Reducing vehicle weight is one of the most important avenues for reducing CO2 emissions. 1% of weight reduction results in 0.7% of fuel savings. Recent evidence indicates that cars can be made a third lighter, leading to 23% lower fuel consumption, at very modest costs without loss of functionality or safety;
• Average new car weight in 2011 was 1,389 kg, the highest since 2003 and up 53 kg since 2009. Carmakers have been pursuing many avenues for lower fuel consumption, but not making vehicles lighter;
• Had carmakers kept vehicle weight at 2009 levels, their average CO2 emissions would have been almost 4 g/km lower: 132 instead of 135.7 g/km;
• Part of the lack of progress can be explained by the structure of the EU law. The CO2 target per manufacturer depends on the weight of the vehicles each carmaker produces. Carmakers that cut average vehicle weight by 100 kg see their company CO2 target for 2015 tightened by 4.57 g/km. This seriously blunts incentives for lightweighting of vehicles;
• Changing the law for it to be based on vehicle size (so-called ‘footprint) instead of weight would give carmakers full CO2 credit for making vehicles lighter.