PVS talks... Real World Driving Emissions

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A PVS White Paper by Daniel Tuz

INTRODUCTION TO REAL WORLD DRIVING EMISSIONS

In the Autumn Budget 2017, the government announced that it would legislate in a future Finance Bill, for the WLTP system to be introduced from April 2020.
As of the 6th April 2018 the company car tax rate for a diesel certified RDE2 will be equivalent to that of a petrol car with the same emissions band. Any diesel car not certified RDE2 (Real World Driving Emissions Stage 2) will be subject to a 4% supplement, and from September 2018 the WLTP (World Harmonised Light Vehicle Testing Procedure) approval will be mandatory for new cars.
This paper is designed to explore how the WLTP and the RDE2 supplement will affect official performance and emissions figures to try and remove the uncertainty surrounding potential legislation changes for company car drivers, fleet managers and fleet owners.

EMISSIONS TESTING: PRESENT & FUTURE

Previously, new vehicles were tested using the NEDC (New European Driving Cycle) standard, an outdated procedure, designed in the 1980’s based on theoretical driving and performed in a laboratory. WLTP is the new emissions testing procedure replacing the NEDC test. The WLTP is accompanied by the RDE2. 
WLTP is a lab test designed to bridge the gap between manufactures published performance statistics and those achieved in real life. The speeds involved are more realistic of those driven on actual roads, with higher speeds, harder acceleration and braking as well as representations of traffic lights, congestion and so on.
Under RDE2 vehicles are driven on public roads over a wide range of different conditions. Specific equipment installed on the vehicle collects data to verify that legislative caps for pollutants such as NOx are not exceeded. As such, RDE2 enhances the WLTP by ensuring the delivery of low emissions over on-road conditions.

EFFECTS OF WLTP AND RDE2

With the fleet industry speculating that WLTP test figures are to be adopted by HM Treasury by 2020/21  it is important to understand the effects of these changes. According to FleetNews, 98% of new vehicles fail to meet their published consumption figures. Furthermore, FleetNews expects the introduction of WLTP to yield significant changes in official consumption figures (fig. 1). RAC notes that the new tests will give consumers fuel economy information that is far closer to what they can expect from behind the wheel.
However, one implication of bridging this gap will inevitably be an increase in CO2¬ emissions. A significant increase in published CO2 emissions will yield an increased taxable BIK, making it necessary for company car fleet providers to find a sustainable solution accounting for this. Furthermore, vehicle excise duty may increase for equivalent models.
The RDE2 standard sets a maximum permitted level of car NOx emissions in real world driving situations, and it is measured through portable emissions-measuring equipment in a variety of real driving trips. Cars must pass the certified level of NOx emissions irrespective of the driving behaviour during the test - for example, the level of emissions produced when an engine is under stress, say, by driving uphill. There are no diesel cars that meet the new RDE2 standard.

ADOPTING THE NEW STANDARDS

Adopting the RDE2 certification has a significant effect on diesel company cars, since no diesel car is currently RDE2 compliant, company car tax for all diesels cars will be subject to a 4% supplement. A summary for two popular cars [8] is shown below (see fig. 2). However, this is still determined by the NEDC emissions standard and is a short-term outlook.

When WLTP is used to determine the company car tax rate (expected in April 2020) then it is expected that vehicles will have increased published CO2 of approximately 20g/km. For the above examples we would get the following changes (see fig.3).

Changes brought by WLTP will affect the amount of corporation tax a business pays, take the Ford Mondeo as an example with 129 g/km CO2 emissions and a p11D value of £20,140. Currently, business can wipe 18% of this cost off their profit on reducing balance basis, however the increase in published CO2 moves the Mondeo into the special rate band so that only 8% can be written down (see fig 5).

Finally, applying the expected WLTP emissions figures to VED for some of the vehicles above it is clear to see that purchasing a new car will become even more costly in a tight economy (see fig.4).

CLOSING REMARKS

Emissions and consumption certification tests are changing to a new standard WLTP and RDE2 that bridges the gap between real world performance and published manufacturers statistics. WLTP and RDE2 are significant driving factors in the transition to less polluting, zero and ultra-low-emission cars. The introduction of RDE2 now will help reduce NOx emissions and improve local air pollution in support of the ‘UK plan for tackling roadside nitrogen dioxide concentrations’ by forcing fleet managers to move away from a purely diesel-based solution.

When HM Treasury adopts the WLTP certification to determine BIK, VED and Corporation Tax there will be increases that effect all parties. As the government continues to encourage high emissions vehicles off the road, it is clear to see that drivers and owners of plug-in hybrid and electric vehicles will be least affected by the new testing procedures.

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