T&E: Car makers manipulate MPG figures

New research provides evidence that vehicle manufacturers are continuing to manipulate ‘official’ fuel economy figures.

That is the view of a new report by Transport & Environment (T&E). Its ‘2014 Mind the Gap’ report analysed real-world fuel consumption by motorists that, it says, “highlights the abuses by car makers of the current tests and the failure of EU regulators to close loopholes”.

“Half of the official fuel efficiency gains made since EU laws were adopted in 2008 are hot air.” It says that companies are producing official fuel economy figures in laboratories that cannot be replicated in the real world.

T&E says that, on average, across all car brands, the gap between real-world fuel consumption and carmakers’ claims has widened from 8% in 2001 to a staggering 31% in 2013 for private motorists.

According to the report: “The obsolete test is unrepresentative of modern cars and driving styles and is full of loopholes that car markers exploit to produce better test results. Carmakers produce specially prepared prototype vehicles for the test and pay testing services that help to optimise the results.

It adds that a new, “more realistic and robust global test” – the WLTP – is scheduled to be introduced in 2017, but EU countries are yet to confirm the date because they are “under pressure from car makers that want to be able to keep exploiting the loopholes in the current test rules until at least 2022”.

Greg Archer, T&E’s clean vehicles manager, said: “The gap between real-world fuel economy and distorted official test results has become a chasm.

“The current test has been utterly discredited by car makers manipulating official test results. Unless Europe introduces the new global test in 2017 as planned, car makers will continue to cheat laws designed to improve fuel efficiency and emissions reductions. The cost will be borne by drivers who will pay an additional €5,600 for fuel over the lifetime of the car compared to the official test result.”

Download the full T&E Report.

Next Green Car announces 2014 Award winners

Next Green Car, the UK’s no. 1 green car website, today announces the winners of the Next Green Car Awards 2014, highlighting this year’s best green cars to come onto the market.

Now in its seventh year, Next Green Car has made awards across eleven vehicle categories including two new categories Sports Utility Vehicles (SUV) and Light Commercial Vans (LCV) as well as the ‘Next Generation’ Award, which includes new technology models close to market launch.

The eleven winners are selected from shortlists of thirty-six of the UK’s greenest new cars of 2014, all selected for their environmental Next Green Car Rating (NGC Rating), level of innovation, value, drive experience and design.

As noted by Dr. Ben Lane, Managing Editor of Next Green Car “The 2014 winners reflect three key green car developments: the electrification of the drive-train (including fully electric vehicles and plug-in hybrids), the continuing improvements in fuel efficiency (for all fuels), and the realisation that petrols may have the environmental edge over diesels for urban use.

“While all the winners and commended entries are highly innovative in the power-train technologies they employ, they also share the objective of wanting to improve the driver experience. In the coming years, ergonomics is set to become as important as engineering in the drive to design green and efficient vehicles.”

The winners and commended entries of the Next Green Car Awards 2014 can be viewed at: www.nextgreencar.com/awards-2014/.

OECD calls for BIK rate rise

New research by the Organisation for Economic Co-operation and Development (OECD) recommends company cars and diesel should be taxed more heavily to reduce carbon emissions, traffic congestion and air pollution.

Currently, most OECD member countries treat only 50% of the personal benefit to employees from company cars as taxable.In situations where employers cover fuel expenses, this favourable tax treatment creates an incentive for employees to use company cars for personal use, and to drive longer distances than they might do otherwise.

This inevitably causes negative fiscal, environmental and social impacts: including more air pollution, traffic accidents, congestion and noise, as well as increased greenhouse gas (GHG) emissions contributing to climate change.

A study of 27 OECD countries plus South Africa, argues that under-taxing company cars amounts to an average annual subsidy per car of around £1,260.The subsidy ranges from just £45 in Canada to £2,178 in Belgium.

The OECD research suggests that in the UK company car drivers receive an average annual subsidy of around £880.

The total cost across the 28 countries examined is estimated for 2012 at £21 billion of foregone tax revenues, according to the reports.

The environmental and social costs are higher still. Increased contributions to climate change, local air pollution, health ailments, congestion and road accidents from the under-taxation of company cars in OECD countries is estimated to cost £91 billion.

Adding to environmental concerns, 33 of 34 OECD countries tax diesel at a lower rate than petrol, even though diesel vehicles produce more carbon emissions per litre and more harmful air pollutants than petrol vehicles. Diesel contains approximately 18% more carbon per litre than petrol, yet remains the most used vehicle fuel in 23 of 34 OECD countries, due in part to this tax differential.

The OECD is calling on governments to stop subsidising company cars and to phase out the diesel tax differential. This would benefit public finances as well as air quality.

Simon Upton, OECD Environment Director, said: “The cost of driving a car today does not properly reflect the impact on the environment and to society. Taxing diesel fuel and company cars correctly would help to fix this,” “Governments should stop offering financial incentives to drive cars and to run them on fuels with a heavy environmental footprint.”

An OECD policy brief, Under-taxing the benefits of company cars, shows that perverse tax incentives in many countries are encouraging company car owners to drive up to three times as much as people with private cars. On average, OECD governments only tax about half the benefits accrued by employees from company car use under personal income tax regimes.

A separate OECD study, The Diesel Differential, argues that applying lower tax rates to diesel goes against efforts to reduce emissions and air pollution.

Transport accounts for a quarter of carbon emissions in most OECD countries and is a major source of air pollution. In the European Union, company cars make up 12% of cars on the road and around half of new registrations, while 55% of new registrations are diesel cars.

Download the full OECD Report.