Vehicle Certification Agency - Home Page VCA Offices  

Home Page > Fuel Consumption and CO2 > Cars and Carbon Dioxide

Cars and Carbon Dioxide

The accumulation of key greenhouse gases (most importantly CO2 and methane) in the atmosphere due to human activities is contributing to climate change. Unless action is taken to reduce emissions of greenhouse gases, such as CO2, the whole pattern of the world's weather could change, increasing the frequency and intensity of heatwaves, floods, droughts and storms. The Climate Change Act (2008) set a long-term legally binding framework for greenhouse gas reduction in the UK. The Act requires the UK Government to reduce greenhouse gas emissions by at least 34% by 2020 and 80% by 2050 from 1990 levels in the UK. The Government has set out its plan of action for greenhouse gas reduction in the Carbon Plan (December 2011). The plan identifies that transport has a critical role in meeting the Climate Change Act (2008) obligations.

Transport is an engine for economic growth.  Its role in moving people and goods around the country is vital, but it is also a major source of greenhouse gas emissions. In 2013, domestic and international transport accounted for 26% of all UK greenhouse gas emissions. The Carbon Plan identifies a wide-ranging strategy for reducing emissions from the transport sector. In the short term, the most significant greenhouse gas savings from transport are likely to come from improving the fuel efficiency of conventional vehicles and increased use of sustainable biofuels.

The CO2 emissions of a car are directly proportional to the quantity of fuel consumed by an engine. While there has been progress in reducing emissions of air quality pollutants from vehicles, there has been less progress in reducing CO2 from cars despite improvements in engine efficiency. Nevertheless, despite the tendency in recent years for cars to become heavier as showroom models arrive better equipped and with more features than ever before, consumers are increasingly choosing lower CO2 emitting vehicles and so the rate of CO2 reduction is showing some improvement.

Measures to reduce car CO2 emissions

In 1998, the European Commission and industry associations of the major motor vehicle manufacturers agreed to reduce the average CO2 emissions of new cars. This voluntary agreement aimed to cut the average CO2 emissions of new cars by over 25% by 2008/9 to 140g CO2/km, and as a result to see a 25% improvement in average fuel consumption.

In 2009 European regulation setting binding targets to reduce the CO2 emissions of new cars (EC Regulation No. 443/2009) entered into force.  The main features of the Regulation are as follows:

  • The target is for an overall European fleet average of 130g/km of CO2 emissions by 2015 (phase in from 2012);
  • In order to meet this average, manufacturers are set a specific emissions target to meet, based on the types of vehicles they actually sell in any given year — rather than requiring each individual vehicle to be less than 130g CO2/km.  This allows a broad range of vehicles to remain on sale with manufacturers deciding where they make improvements to ensure compliance;
  • The 'type' of vehicle is currently determined by its mass.  Manufacturers that sell predominately heavier cars will have a higher grammes of CO2/km target;
  • There are different arrangements for manufacturers that produce very small numbers of cars in any year, so as to protect the diversity of the market;
  • There is a further target for improvement from 2021, set at 95g CO2/km (95% fleet phase in from 2020).

There are several facts to bear in mind for anyone owning or driving a car who is wondering how the Regulation will affect them:

  • The regulation is purely a matter for manufacturers.  It will not directly require drivers or car buyers to do anything different.  However, manufacturers might encourage sales of their more fuel-efficient models in order to ensure that they meet the target that they have been given;
  • It works on an average basis.  It does not require individual cars to meet a particular threshold for CO2 (unlike air quality legislation) or ban cars on the basis of their CO2 emissions;
  • It only applies to new cars.  It does not mean that older, higher-emitting, cars have to be taken off the road;
  • It applies to all new cars registered in the EU.  It does not just apply to European manufacturers;
  • It is not about setting different targets for different countries.  Whilst manufacturers may, of course, choose to vary what they offer between countries, the targets are for the EU as a whole;
  • It does not tell governments how to set vehicle-related taxes.  This will continue to be a matter for each country.

In the UK, a number of other steps have been taken to promote the purchase and use of more fuel-efficient vehicles:

  • In the March 2001 Budget the Chancellor announced the extension of the lower rate of Vehicle Excise Duty (VED) to cover cars in the Private and Light Goods (PLG) taxation class with an engine size of 1549cc or less; 
  • Since March 2001, a system of Graduated VED has been in operation for new cars based primarily on their level of CO2 emissions. The system is currently comprised of 13 CO2 bands. Since April 2010, a different rate of tax applies to a vehicle at first registration (first year rate).  The standard year rate applies in subsequent years; 
  • Since April 2002, company car tax has been based on the CO2 emissions of the vehicle provided to an employee for their private use.
  • From January 2011, the Government has offered grants of up to £5000 off the price of an Ultra Low Emission Vehicle (ULEV).  ULEVs are pure electric and hybrid cars that emit 75g or less of CO2 per kilometre from the tailpipe.  They are also totally exempt from VED – see for more details.  
  • Since April 2013, news cars emitting less than 95gCO2 per km can qualify for a 100% first-year allowance. Cars that are leased do not qualify.
  • Electric vehicles are also exempt from the fuel benefit charge, as electricity is not a fuel.

CO2 Targets for Vans

In June 2011, Regulation EC/510/2011 entered into force. It follows a similar format to the cars regulation, but applies to light-duty vans (that is N1 vehicles under the definitions used in European legislation). It sets a near-term European fleet average target of 175g CO2/km to be achieved by 2017 (phased-in from 2014).  A longer term target of 147g CO2/km has been set for 2020.

In the UK, a number of measures have been introduced to promote the purchase of zero-emission vans:

  • Zero emission vans currently pay 20% of the van benefit charge for vans which emit CO2. In Budget 2014 the Government announced this support will be extended to 5 April 2020 on a tapered basis.
  • Electric vans are also exempt from the van fuel benefit charge, as electricity is not a fuel.
  • From January 2011, the Government has offered grants of up to £8000 off the price of an ULEV van. 


Link to Information on Car Fuel Data and CO2 emissions - next page