Fuel efficient vehicles are good for EU employment, drivers, economy and the planet. Over 100,000 new manufacturing jobs could be created in Europe by investing in the development and manufacturing of fuel efficient technologies to make cars greener, a new report published by Transport & Environment (T&E), the sustainable transport campaigners, says.

The report (here, pdf), conducted by the Dutch consultancy CE Delft, dispels industry’s claims that reducing CO2 emissions from cars would have a negative impact on automotive jobs and competitiveness in Europe. It also highlights that money saved through using less fuel increases consumers’ disposable income, which in turn creates extra jobs across the EU economy.

In 2009, legislation was adopted that requires cars sold in Europe to emit an average of 130g CO2/km by 2015 and 95g by 2020. In July 2012, the Commission proposed to confirm the 95g target for 2020 and the way it should be met.

“CE Delft have reviewed 23 studies and concluded that low carbon cars are likely to be good for jobs,” says T&E’s Greg Archer. “For instance, one recent study (3) shows cutting CO2 emissions from cars could create over one hundred thousand high-quality, engineering jobs in Europe.”

Low carbon cars save money that can boost the sluggish EU economy The European Commission estimates the new regulation will boost the EU economy by an average €12bn per year between 2020-2030, thanks to much lower fuel consumption resulting from tougher CO2 targets. It also forecasts annual expenditure on labour will increase by €9bn. This is because vehicle manufacturing is labour intensive while fuels are mostly made from imported oil and need fewer jobs. The CE Delft report supports these conclusions.

For drivers, a target of 95g will provide annual fuel savings of over €500. These savings will be much greater than the additional costs of buying a more fuel efficient car, enabling drivers to recover their costs in 1.5 to 2.5 years. More importantly, the savings would rise to over €750 per year and still payback in around three years if a more ambitious target (80g/km) was adopted. Since Europe will also import less oil, it will also increase resiliency to oil price shocks and improve the balance of trade.

Archer adds, “The US recently announced its plans to double fuel economy by 2025. In Europe the planned improvement is around a third; that’s good, but not good enough. Without tougher CO2 targets, European carmakers risk losing their competitive edge in the global markets.”

“We want a 2020 target of 80g/km and 60g/km by 2025. This would drive advanced technologies into the market and ensure Europe retains its leadership”, Archer concludes.

Flexibilities in the proposal will reduce the benefits The EC proposal extends to 2023 the system of over-rewarding sales of electric vehicles, known as “supercredits”, which will weaken the CO2 target. “Supercredits reward manufacturers for selling imaginary vehicles. They create the illusion fuel economy is improving whilst actually allowing carmakers to sell gas-guzzlers that don’t count towards their target; this is madness!” Archer says.

It would be much more effective to require carmakers to sell at least 2.5% of vehicles with ultra-low emissions by 2020. Those manufacturers that overachieved the sales target would be rewarded through a relaxation of their overall CO2 target. At the same time, those that underachieved would be expected to do more to improve the efficiency of the conventional vehicles they sell. The EU should also do much more to support the shift to electric and hydrogen vehicles – such as through investing in refueling and fast recharging stations along key highways.

“The Parliament and Council have the opportunity to improve the Commission proposal”, Archer concludes, “by setting more ambitious targets and closing loopholes. Low carbon vehicles are part of the solution to Europe’s economic problems – good for jobs and the economy, good for drivers and good for the environment too.”

(source: T&E)