Improving the efficiency of petrol and diesel powered cars is essential for reducing emissions. Currently new cars emit around 150gCO₂/km travelled. In April 2009 the EU adopted legislation which requires manufacturers to ensure that the average emissions of all the new cars they sell across Europe is less than 130 gCO₂/km by 2015 and less than 95g by 2020. New car CO₂ legislation is critical in driving improved fuel efficiency over time, and has resulted in significantly more fuel efficient new cars purchased in 2008-9 compared with 1997.

The EU new car CO₂ targets relate to the European average and do not require that new cars sold in the UK achieve the same reductions in new car CO₂/km. Historically, new cars sold in the UK have been more CO₂ intensive than the EU average. However, the Committee advises that in order to meet carbon budgets, the fuel-efficiency and technology in new cars in the UK should be improved so that by 2020, new cars achieve 95gCO₂/km.

Figure 6.10 compares the EU target trajectory for new car CO₂ with our revised Extended Ambition Scenario trajectory. If this is achieved, emissions could fall by 16 MTCO₂ in 2020. This will require deployment of the full range of low carbon options: improved fuel efficiency of combustion engines, non-powertrain measures (i.e. measures not relating to the engine or transmission), increased hybridisation and increasing numbers of electric cars/plug-in hybrids.

Average new car emissions in the Extended Ambition scenario and trajectory under the revised EU framework

Carbon intensity of new cars fell from 158g/km in 2008 to around 149g/km in 2009, suggesting a change in car purchase behaviour reflecting the recession and increased oil prices, the impacts of which have been reinforced by various policies (the car scrappage scheme, VED differentiation, fuel duty, company car tax). To read more about these policies, visit the Department for Transport website.

The Committees 2nd Annual Progress Report concluded that further progress towards achieving 95gCO₂/km in the UK by 2020 could be incentivised by strengthened fiscal incentives (e.g. increasing VED differentiation according to fuel efficiency, and offsetting any oil price reductions through increased fuel duty).