Fuel consumption and carbon dioxide emission values for new cars in Europe are determined via the so-called type-approval process, which involves testing vehicles under laboratory conditions using the new european driving cycle (NEDC). The type-approval values are the basis for consumer information, CO2 regulation, and CO2-based vehicle taxation, and therefore ought to provide a reliable and stable indication of fuel consumption and emission levels observed under "real-world" conditions on the road.
This analysis, aggregating several large sets of on-road driving data from various European countries, shows that that expected correspondence between type-approval and real-world values is not as strong as it should be, and is getting progressively weaker. While the average discrepancy between type-approval and on-road CO2 emissions was below 10 percent in 2001, by 2011 it had increased to around 25 percent.
The observed increase of the gap is most likely due to a combination of factors:
- increasing application of technologies that show a higher benefit in type-approval tests than under real-world driving conditions (for example, start-stop technology)
- increasing use of ‘flexibilities’ (permitted variances) in the type-approval procedure (for example, during coast-down testing)
- external factors changing over time (for example, increased use of air conditioning)
The increase in the gap was especially pronounced after 2007–2008, when a number of European Union Member States switched to a CO2-based vehicle taxation system and a mandatory EU CO2 regulation for new cars was introduced.
The public policy implications are significant. The growing gap between reported efficiencies and actual driving experience halves the expected benefits of Europe’s passenger vehicle CO2 regulations. It creates a risk that consumers will lose faith in type-approval fuel consumption values, which in turn may undermine government efforts to encourage the purchase of fuel-efficient vehicles through labeling and tax policy. For tax authorities, the gap between type-approval and real-world CO2 values translates into a gap between actual and potential revenues from vehicle taxes. And increasing discrepancies between type-approval and on-road CO2 emissions can result in a competitive disadvantage for some vehicle manufacturers, as it tilts the playing field.