The auto industry shares concerns about global warming and is contributing actively to finding sustainable solutions. Thanks to huge efforts by industry and billions of euros of investments in R&D, the sector is on the right path to bringing down CO2 emissions.
Contents:
Progress in emissions reductions
Europe: The cleanest vehicles and most stringent targets in world
Targets: Ambition and feasibility
Super-credits: Incentivising clean vehicles
Test cycle: Making reliable comparisons between vehicles
Progress in emissions reductions
In 2011, average fleet emissions were 136.6 gCO2/km compared to 186 gCO2/km in 1995, which is a 26.6% decrease over the period. This is the result of long-term efforts on the part of the industry, which have been sustained both with and without legislation.
It is clear that CO2 levels from vehicles have to continue on their downward trend, and the industry is committed to deliver on this. However, there are presently legal and market uncertainties about setting the long-term (post 2020) targets – in terms of what will be the lead technology in the long-term, the future regulatory regime, as well as the planned new test cycle and procedure.
Europe: The cleanest vehicles and most stringent targets in world
Both the existing targets for 2015 and the targets proposed for 2020 are the most stringent in the world. Therefore, the proposed targets for the European fleet are far tougher than those in the US, China or Japan. Now is the time for other regions of the world to catch up.
Targets: Ambition and feasibility
Europe’s manufacturing industry provides jobs and stability for the economy. Indeed, countries with a strong manufacturing base have weathered the current crisis better than others. This is particularly true for the strategically important automobile sector which accounts directly and indirectly for a major share of GDP in many European countries.
Unfortunately, despite the fact that the EU auto industry is already delivering vehicles with the highest environmental and safety standards in the world, sales and jobs in the sector are constantly declining. Between 2007 and 2012, new car registrations dropped by 3.5 million units. The situation is set to further deteriorate in 2013. Considering that most manufacturers are losing money in Europe, the industry needs as supportive and competitive a regulatory framework and market environment as possible in order to keep production and jobs in Europe. That is why targets – while ambitious – should be feasible.
There are a number of different estimates for the costs of meeting these targets. The International Council on Clean Transportation (ICCT) estimate – which is one of the most optimistic – is in the region of €1,500 per car. Particularly for the small and mid-sized cars, such an additional cost can represent about 15% of their list prices, which clearly cannot all be passed on to the consumer.
Indeed, price is the number one factor motivating a customer’s purchasing decision. In a sector where margins are narrow and consumers have a wide range of choice, even a slight relative price rise can make a manufacturer’s range uncompetitive. Affordability is key to actually getting the cleanest technology on the roads.
Super-credits: Incentivising clean vehicles
Under the ‘super-credits’ incentive scheme, a vehicle with extremely low emissions counts more to meeting the manufacturers’ fleet CO2 target when it is registered. Super-credits are being used worldwide, and most other regions have similar schemes (US, Japan, Korea, China).
The 2020 target is not achievable for some manufacturers without a certain share of hybrid and electric engines across the fleet. However, it is assumed that in 2020 over 90% of the new European vehicle fleet will still be powered by conventional combustion engines. This means manufacturers must maintain their efforts to optimise this technology, while at the same time developing other new low-emission technologies.
Investment in alternative vehicle research and development is enormously costly, and uptake has been sluggish. Super-credits are a strong incentive for manufacturers to keep investing in further developing these technologies. Indeed, they are one of the few instruments on the EU level to incentivise these innovative technologies.
The numbers of these low-emitting vehicles being produced is still relatively small (in 2012 they represented 0.2% of the market), so there is no risk of super-credits significantly diluting the stringency of the overall fleet targets. However, in the meantime, they provide a means to make work on future technological improvements a slightly less risky investment.
Test cycle: Making reliable comparisons between vehicles
Manufacturers provide information about the emissions footprint and fuel economy of their vehicles based on legal requirements set out by EU law and UNECE regulations. The figures presented to the customer are verified by an independent authority, which is often a public authority.
The CO2 emissions information is derived from a part of the type-approval process called the New European Driving Cycle (NEDC) test, which is a standardised procedure designed to compare different vehicles under the same conditions. Its aim is to represent car use, in a repeatable, consistent and measurable fashion. As such, the test is necessarily performed under laboratory conditions according to legal requirements, which are different to real life conditions.
The purpose of the test is therefore to enable the customer to make reliable comparisons between vehicles regarding fuel efficiency and emission values, and to provide additional information to facilitate the purchasing decision.
The actual real-world fuel efficiency experienced by drivers varies widely as it depends on many external factors such as traffic conditions, terrain, driving behaviour, road type, vehicle load, etc. Regarding driving behaviour, a case study by one manufacturer showed that after eco-training individual drivers’ average consumption was 5.5% below the NEDC figures. If drivers are ‘smart’ in the way they drive, their fuel consumption (and CO2) can be reduced by around 22%.
The automotive industry is actively contributing to the development of the new test cycle – the Worldwide Harmonised Light Vehicles Test Procedure (WLTP) – which will be designed to better represent real-world driving.
