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Vehicle fuel efficiency

The European Union has cut the emissions of new cars by nearly one fifth. Scaling up this solution would produce carbon cuts equivalent to Saudi Arabia’s annual emissions while cutting air pollution and improving energy security.


Climate impact

The EU has been successful in significantly increasing the fuel efficiency of new cars. The average CO2 emissions of new cars fell by 17% from 2006 to 2012, from 160 g/km to 132 g/km.

If the EU’s fuel-efficiency approach were scaled up to the entire world, this could result in emissions savings of 262 Mt annually in 2025. By 2030, the impact would double to 525 Mt.

The expected adoption of new EU standards for 2025 would result in an even larger impact. One estimate suggests that scaling up the EU’s proposed targets could see savings of as much as 1.9 Gt in 2030.

Success factors

The EU started programmes to reduce vehicle emissions in the mid-1990s. In the beginning this took the form of voluntary targets for manufacturers. The targets became mandatory in 2009, when a maximum of 130 gCO2/km was set as the average for new vehicles in 2015. Passenger car standards of 95 g/km of CO2 will be phased in for 95 per cent of vehicles by 2020, with 100 per cent compliance required by 2021.

The EU applies targets for both passenger cars and light commercial vehicles. The European Automobile Manufacturers Association (ACEA) and the European Commission monitor progress jointly. Manufacturers that do not comply are subject to penalties that rise progressively. In 2019, the penalties will increase to 95 euros per car for each g/km over the target.


More fuel-efficient vehicles tend to cost more to buy and less to run. Overall, increasing fuel efficiency is estimated to save money, with an abatement cost of –55 $/tCO2e to –29 $/tCO2e. The total savings of scaling up this solution are estimated to be $8 to $15 billion per year in 2025 and $15 to $29 billion in 2030.


Better fuel efficiency improves air quality, especially in urban areas. Fuel-efficiency standards benefit energy security because they reduce demand for imported fuels. Estimates for employment impacts vary: some studies suggest a negligible net impact, while others foresee significant numbers of new jobs.

Barriers and drivers

  • The technologies needed to comply with fuel efficiency standards are available and in many cases are cost-effective compared with driving less efficient cars. Most large vehicle markets already apply efficiency standards, helping ensure an adequate implementation infrastructure.
  • Consumers are generally more concerned about prices than environmental impacts. Informing consumers about the benefits of fuel efficiency can increase support.
  • There is a considerable gap between real-world fuel economy and results under laboratory test conditions. Car manufacturers employ a number of tactics to improve a car’s performance during testing, as infamously highlighted by the Volkswagen scandal. Therefore vehicle testing and monitoring must be improved.

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