Eco just went mainstream

Every party is at it. The LibDem council in Richmond is calling for owners of gas-guzzlers to pay double to park outside their home. There’s a Labour MP who wants prominent cigarette-style health warnings on car adverts to show how bad they are for the planet, and even the Tories have said that although they’re not ‘anti-car’, they are looking at plans to hike fuel and other related transport taxes for cars “to reflect their true environmental cost”. Eco just went mainstream.

However, the UK car fleet industry is one of the cleanest going: as a pioneer in CO2-related company car taxation since 2002, it knows the benefit of choosing less-polluting vehicles. If there’s a business manager or driver still not at least vaguely aware of the emissions of their car four-and-a-half years after the CO2-graded company car tax bands kicked in, I’d be very surprised.

Your car’s grammes per kilometre CO2 output may not yet be the stuff of pub chat (let’s leave it that way, too), but the fleet industry and car manufacturers themselves now know much more about what car models, fuel types and individual engines are likely to be the most tax-efficient (and potentially planet-saving) than ever they did before the emissions-based tax system focused their minds so thoroughly.

This feeling of change is not just speculation, or pride-induced guesswork, either. Evidence in The Society of Motor Manufacturers’ and Traders’ (SMMT) 2005 report on UK New Car Registrations by CO2 Performance states as much: “The year before the CO2-based company car tax was introduced – 2001 – less than 9% of the market was under 140g/km. By 2005 that level had doubled to 18%.”

As tax bands tighten again in 2008/09 the figures should only improve, and the ones who opted out of the scheme to save tax on their high CO2-emitting vehicles since the scheme began will no doubt get caught in the private motorist’s soon-to-be-expanded emissions tax net.

Stern test

So the string of new reports out in the past month should not worry UK fleets as much as other drivers. Yes, costs will rise and be painful, but perhaps not as much as for private motorists or European fleet markets. The biggest UK-generated (but firmly global in scope) report was the Stern Review (www.sternreview.org.uk) on the economics of climate change published October 30. Commissioned by the Chancellor in July 2005, it was carried out by the head of the Government Economic Service and former World Bank chief economist, Sir Nicholas Stern.

Despite the doom-mongering in the national media and elsewhere, it actually says the situation is not only solvable but could – if fully embraced by a UK business world already at the heart of European carbon-trading for instance – be a big business opportunity in terms of early technology adoption and development, and future savings too. Another report, the EU’s Action Plan for Energy Efficiency published on October 19, proposes a host of measures that UK fleets are also better placed to deliver on.

A way to go

Of course, the UK fleet industry still has a long way to go before that 18% of cars at 140g/km figure mentioned earlier by the SMMT becomes an average. The industry looks set to miss its voluntary targets to reach the same figure across Europe by 2008/09 – as a study out last month from the Transport and Environment (www.transportenvironment.org) has revealed – but the EU Commission is determined to step up a gear. It has publicly stated it will move to enforce a 120g/km average on new cars by 2012 via a strategy to be adopted before the end of this year combined with legislation in 2007 – if the carmakers don’t come up with a way forward themselves.

Meanwhile, the EU Commission is asking members to adopt its proposal to relate taxation to CO2 performance – like UK fleet has pioneered – across Europe. Other proposals include the compulsory fitting of tyre pressure monitoring systems on new cars from 2008/09 to ensure fuel economy is optimised. Few fleet managers would argue with that one on climate, cost saving or safety grounds.

That there will be more cost to business motoring is not in doubt (as there looks to be for other sectors such as aviation and buildings), but given the inroads UK fleet has already made in reducing its CO2 footprint, the extra burdens should not seem as big a jump as they will to industries not even taxed on the fuel they use, let alone the CO2 they emit.

We can’t all claim to have welcomed the move to CO2 company car tax in the first place, but we’re at least up to speed on how to deal with such taxes, and so in a better position than most to cope with it.