Saving several hundred euros a year on fuel for your car is an attractive proposal for anyone with added benefits of cleaner air. High fuel consumption is directly related to polluting emissions, and more fuel efficient cars mean lower bills for drivers. Yet the expense faced by the car industry, forced to further reduce emissions to meet upcoming targets, is likely to increase the cost price of new cars.

Over 17 years, starting from 1990, EU greenhouse gas emissions showed a general decline of 15 per cent overall. The European Commission has adopted a wide range of measures to implement its 2007 strategy to reduce those emissions coming from new cars and vans. Yet, with a higher number of vehicles on the road each year, transport emissions continued to climb despite improvements in fuel efficiency. When improvements in efficiency were unable to keep pace with the growth in vehicle use it was clear that something had to be done.

A 2009 regulation aimed at reducing carbon dioxide emissions from light-duty vehicles, through emission performance standards for new passenger cars, set a limit for carbon dioxide from car exhaust at an initial 130 grams per kilometre, with tighter controls by 2020. The limit was close to what was being achieved already but future emissions targets will require an innovative leap by the vehicle industry.

Emissions from Europe’s transport sector, which accounts for a fifth of all EU greenhouse gas discharges, appeared to drop dramatically due to the standards applied to new cars. However, it was discovered last year that European car manufacturers were ‘optimising’ pollutant emission tests by exploiting loopholes to exaggerate fuel efficiency and skew carbon counts.

A European Commission report has revealed how test techniques helped carmakers push down readings by using different tyres with more traction or driving on an unrealistically smooth road surface. The ruse made a dip in average EU emissions of CO2 look better than it actually was by a third. At times the level of emissions in a car was damped down to appear as half of what it really was. (Source: ESN sector report)

Nitrogen oxide emissions, linked to lung disease, were miscalculated to a still greater extent than carbon dioxide levels according to an investigation by the European Commission. A policy document published last year said “real-world” nitrogen oxide emissions were roughly five times the EU limit, adding that this had a major impact on pollution and generated “negative publicity and reputational damage for vehicle manufacturers”.

EU regulators have been working on legislation that will require vehicle fuel use to be tested on roads rather than in laboratories. This should help close the loopholes which allowed car makers to exaggerate fuel-saving and emissions credentials.

Tomorrow will see the dawn of some new lines drawn in the sand. From September 1, tougher EU testing standards for the car and van industry will come into force in a push for better accuracy. Meanwhile, Europe’s car-makers have been looking at how to meet the new challenges of an even lower emissions target calling for 95 grams per kilometre target after 2015. Greenpeace has pointed out that if half the fleet were made up of electric cars and hybrid cars then even 60g/km of carbon dioxide would be attainable.

Will the 2020 targets increase the price of cars and vans? It all depends on how much producers pass on costs. The average additional manufacturing cost is estimated at around €450 per van and €1,100 per car in 2020. Even if the full additional cost is passed on through higher prices, the European Commission’s impact assessment shows that this extra cost to purchasers will be outweighed several times over by fuel cost savings over the lifetime of the vehicle.

If fully applied, by 2030 the proposals would have saved almost 160 million tonnes of oil, worth about €70 billion euros at today’s prices. They would also prevent the emission of around 420 million tonnes of carbon dioxide, resulting in a savings to society of €100 to €200 for every tonne of CO2 avoided.

The emission limits will only apply to new vehicles. Those sold before 2020 will not be affected and will not have to be taken off the road. But the lower fuel costs of the new vehicles may provide an incentive for replacing old cars and vans.

Technologies are currently available to allow manufacturers to reach the targets at reasonable cost. More work has to be done, particularly in the case of vans, to develop potential technology.

If fully applied, by 2030 the proposals would have saved almost 160 million tonnes of oil

Manufacturers are free to reduce emissions in the most cost-effective manner. It is hoped that the new regulations will not only create an incentive to improve internal combustion engines using petrol and diesel but should also spur electric, plug-in hybrid, fuel cell, natural gas, and LPG gas-fuelled vehicles.

Emissions targets for 2015 are well within the reach of carmakers but 2020 remains a real challenge. According to an investment research sector report drawn up last October by ESN, a network of financial organisations, the new standards are expected to “redefine the automotive landscape, as they globally and rapidly standardise the industry”.

Over the past 10 years, carmakers have already reduced their carbon dioxide emissions by an average of two per cent each year with only a little way to go to reach 2015 targets. Things are set to get more complicated after 2015 as efforts to reach the required average yearly reduction rate must triple.

On the other hand, action on nitrogen oxide emissions will require a technological breakthrough. The vehicle industry was found to be still a long way off 2015 targets for diesel vehicles. Average nitrogen oxide emissions for diesel engines are five times higher than for petrol driven vehicles and must be cut by half. Speed is needed to meet the targets by equipping new vehicles with NOx trapping catalysts.

Almost all the major manufacturers of industrial and commercial vehicles have decided to adopt selective catalyst reduction technology to respect the new legislation on nitrogen oxide emissions. Harmful nitrogen dioxide molecules present in the exhaust gas react are converted by ammonia into harmless nitrogen and water.

Alternatively, low-pressure exhaust recirculation, passing the gases through a cold loop, could prove to be a cheaper and more accessible solution.

The most effective engines allow for fuel savings of around €375 per year. The return on investment for car owners would be three or four years.

Other pollutants in vehicle emissions are regulated through EU legislation governing air quality. The latest emission standards for these pollutants, known as Euro 6, came into force this year.