Fuel economy in the European Union
This report is part of Global Fuel Economy Initiative 2021
Market profile and analysis of fuel consumption trends
In 2019, 11 million light-duty vehicles were sold in the European Union. The average fuel consumption of LDVs in 2019 reached 6.0 litres gasoline equivalent per 100 kilometres (Lge/100 km), down from 7.0 Lge/ 100 km in 2005. This represents a 1% annual reduction in fuel consumption between 2005 and 2019. Preliminary estimates demonstrate that 2020 was an exceptionally important year for the European LDV market, as manufacturers had to to comply with the new CO2 emission intensity target of 95 g CO2/km for passenger cars and 147 g CO2/km for light commercial vehicles. The sales-weighted average rated CO2 emission of new LDVs sold in the EU dropped by an unprecedented 11% between 2019 and 2020.
The sales share of SUVs in the EU market continues to expand, growing from a 7% in 2005 to 36% in 2019. Sales shares of city and medium cars have suffered as a result. This has coincided with the average weight of LDVs increasing from 1 327 kg in 2005 to 1 440 kg in 2019, which is just below the global average.
Historically, the EU has had a high share of diesel engines, and in 2019 was the largest market for diesel LDVs. Nevertheless, diesel sales shares have dropped from 56% of LDV sales in 2015 to 40% in 2019, influenced by the diesel emissions scandal in 2015, along with increasing stringency of pollutant emissions standards in the EU since 2014, especially for diesel vehicles. Gasoline vehicles accounted for the majority of LDV sales 2019, although shares of hybrid, electric and plug-in vehicles have grown in the EU, with each reaching sales shares of 3%, 2%, and 1% in 2019, respectively.
Overview of current fuel economy policy
In 1999, the EU introduced the ‘car labelling Directive’ (Directive 1999/94/EC) which required displaying the vehicle’s fuel efficiency and CO2 emissions. Around the same time, voluntary carbon dioxide (CO2) emissions standards were introduced in the EU, becoming mandatory by 2009. Corporate average CO2 emissions standards for the period 2015-19 were set at 130 g CO2/km for passenger cars, while emissions standards for 2020-2024 were set at 95 g CO₂/km. Under the “Fit for 55” initiative, the EU established new CO2 emissions targets, including a 55% reduction in emissions of passenger cars in 2030 compared to 2021 and a 2035 target that effectively requires all new light-duty vehicles to have zero tailpipe CO2 emissions.
In 2001, analyses revealed an 8% gap between real-world driving fuel consumption and tested NEDC fuel economy values of new passenger cars in Europe. In 2017, this gap had widened to about 39%. In response to the growing gap between tested and real-world fuel consumption, the EU adopted the Worldwide Harmoinzed Light-Duty Vehicle Test Cycle and Worldwide Haromized Light-Duty Vehicle Test Procedure in 2017, which is designed to better reflect real-world driving. From 2021 onwards, new vehicles must be sold with an on-board fuel consumption metre, and manufactures must report annual average fuel consumption to regulatory agencies starting in 2022.
A host of complementary measures have also been introduced, including a super credit multipler for vehicles with rated emissions below 50 g CO2/km (phased in through to 2022), pooling among vehicle manufactueres, derogration for small volume manufacturers, and incentives rewarding sales shares of zero- and low-emissions vehicles exceeding a specified benchmark.