Study: Fuel savings will quickly offset upfront costs of EU CO2 regs

  • 18-Mar-2013 01:35 EDT

Increased spending on new vehicle technologies to comply with proposed European CO2 emissions regulations for 2020 will add between €100 and €1100 to the capital cost of the average new light-duty vehicle in 2020, but also save vehicle owners €400 annually in fuel expenses, according to a new study carried out jointly by Ricardo-AEA and Cambridge Econometrics. That translates into a break-even point for vehicle owners of about three years, if actual technology costs end up aligning with those projected. The study also projects that a shift to low-carbon-emitting vehicles would increase spending on vehicle technology, "generating positive direct employment impacts." At the EU level, the cost of running and maintaining the European car fleet would become €33-35 billion lower each year compared to a “do nothing scenario” by 2030, "leading to mildly positive economic impacts." The study looks only at the impact of improvements related to internal-combustion engines and hybridization; a second phase of the study will "examine the impact of gradually substituting fossil fuels with domestically produced electricity and hydrogen as energy sources for vehicles." EU Regulation 443/2009 set an average CO2 target for new cars sold in the EU at 130 g/km by 2015. The proposed CO2 target for 2020 (95 g/km) is currently under review.

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