The most important questions on fleet consumption: CO2 targets are becoming ever more demanding worldwide

On 17 December 2018, the European Parliament and the European Council decided to tighten the CO2 limits yet again: Car emissions are to be reduced by a further 37.5 percent from 2021 to 2030 – a demanding goal. For Mercedes-Benz Cars, this would correspond to average emissions of 65 g CO2/km per vehicle in 2030 – this would amount to consumption of 2.4 l of diesel or 2.7 l of petrol/100 km. Other challenges: Different CO2 regulations apply worldwide. Here are the answers to the most important questions concerning the topic of fleet consumption and emissions:

1. What exactly is CO2?

Carbon dioxide is an odourless and colourless gas that remains in the atmosphere for an average of 120 years. It is one of the rarest trace gases and only exists in the atmosphere at about 0.0407%. Apart from oxygen, CO2 is the most important gas required to sustain life on earth. It results from burning fossil energy sources (wood, coal, oil, natural gas), among other things, and accounts for the majority of the greenhouse effect caused by humans. Heat and electricity generation, households and small consumers, as well as traffic and industrial production are primary sources.

2. Why do CO2 emissions have to be reduced?

At the Climate Change Conference in Paris (COP 21, 2015), 195 countries reached a global climate change agreement for the first time. The agreement includes a global action plan, which is to limit global warming to well below 2 °C in order to combat climate change. Greenhouse gases are responsible for global warming. The minutes of the Kyoto climate change agreement (COP 3, 1997) lists six greenhouse gases: carbon dioxide (CO2), methane (CH4) and nitrous oxide (N2O) as well as the fluorinated greenhouse gases (F gases): hydro-fluorocarbons (HFCs), perfluorocarbons (PFCs) and sulphur hexafluoride (SF6).

3. What is fleet consumption?

Fleet consumption refers to the average fuel consumption and/or CO2 emissions of a vehicle fleet. This means that vehicles with low or indeed no CO2 emissions can balance out vehicles with higher consumption. This can refer to an individual manufacturer, but also to a group of manufacturers or brands that have merged (so-called pooling). The average CO2 emissions value is calculated as follows: The sum of the certified CO2 emissions values for individual vehicles is divided by the number of new vehicles sold in the calendar year. This results in a CO2 fleet average at “ pool” level for the calendar year. This must be below the pool-specific target value, as otherwise penalties will be payable.

4. What role do NEDC and WLTP play in determining consumption?

The fleet targets are defined up until 2020 according to the NEDC. In the meantime, however, new vehicles are certified according to the more realistic WLTP method. Up until 2020, the WLTP values will be calculated back to NEDC values with the aid of CO2MPAS software developed by the EU “Joint Research Centre” (JRC). However, since the results are based on the stricter parameters of the WLTP test procedure, they are somewhat higher than the original NEDC values. There is, however, no adjustment of the values for this effect. From 2021, achievement of the fleet target will be completely tested in the WLTP.

5. Which value is currently valid?

Regulation (EC) No 443/2009 determined an average CO2 value for passenger cars of 130 g/km for the 2012 to 2015 period. Manufacturer-specific (or pool-specific) values have been in place since 2015. Their linear calculation includes the European target fleet value of 130 g CO2/km, the average weight of a manufacturer's newly approved vehicle, the average weight of new cars approved in the EU between 2014 and 2016 – which amounted to 1,372 kg – as well as a weighting factor. On this basis, each manufacturer can then calculate how much his new vehicle fleet is allowed to emit using a formula.

The average emissions of the new-vehicle fleet of all manufacturers combined is to be reduced to 95 grams of CO2/km by 2021 (corresponds to an NEDC consumption of around 4.0 litres petrol or approx. 3.5 litres diesel/100 km). The value for Mercedes-Benz Cars will probably be around 105 g/km by 2024 on account of the fleet's higher vehicle weight in comparison to the averaged European vehicle fleet. This means that the new Mercedes‑Benz Cars vehicle fleet sold from 2020, including vans with M1 approval, are only allowed to emit on average around 105 g of CO2 per kilometre. Manufacturers are granted some relief during the first year (2020) during the so-called phase-in: In 2020, only 95 percent of vehicles in the manufacturer's fleet have to achieve the target.

6. What limit will apply from 2030?

On 17 December 2018, the European Parliament and the European Council decided to tighten the CO2 limits yet again: vehicle emissions are to be reduced further by 37.5 percent between 2021 and 2030. For light commercial vehicles, a CO2 reduction of 31 percent has been agreed. This value sets an extremely ambitious goal which Daimler as a vehicle manufacturer must face. An interim solution is in place until 2025: A reduction of 15 percent is to be achieved by then for both vehicle classes.

7. But 65 g of CO2 per kilometre is also being communicated for 2030. Does this limit apply to every vehicle manufacturer?

No, there is no overall fleet average across manufacturers: An individual limit is calculated for each manufacturer. This limit is based on the average vehicle weight of the respective fleet. The idea was: Manufacturers that have primarily compact cars in their portfolio should also invest in more efficient drives. Since the springboard will only be determined in 2021 and from 2021 only the higher WLTP values will apply, for Mercedes-Benz Cars it can be roughly said that: Based on a 37.5 % reduction of the interim target of 105 g/km, the limit corresponds to around 65 g/km (correspondingly with diesel engines 2.4 l/100 km, petrol engines 2.7 l/100 km). In cases where the limit of 95 g/km applied to date, an average of 59 g/km is required by 2030 (diesel engines: 2.2 l/100 km, petrol engines 2.5 l/100 km).

8.Where does Daimler stand in relation to the great challenges presented by the new limits?

Daimler has clearly committed itself to the CO2 targets for fleet consumption. The roadmap is in place and the strategic decisions for implementation have been made. The entire Mercedes-Benz Cars portfolio will be electrified by 2022 – from smart to the big SUVs, starting with 48-volt models and ranging from a wide selection of plug-in hybrids to all-electric vehicles. And all-electric models will make up between 15 and 25 percent of Mercedes-Benz Cars total sales already by 2025 – depending on individual customer preferences and the development of public infrastructure. To achieve this, it is planned to launch more than ten all-electric cars. The plug-in hybrid models included, the percentage of xEVs (vehicles equipped with an electric traction motor and external charging capability) in Europe could already be significantly above 40 percent as plans stand today.

9. What will happen if a manufacturer does not comply with the limit?

Penalty payments are threatened starting in 2020 if a manufacturer fails to achieve his specific target. The manufacturer must pay 95 Euro penalty for each gram of CO2 above his target and for each vehicle sold. Exceptions apply to manufacturers with less than 300,000 vehicles per year.

10. What are the so-called super credits?

This regulation is meant to support especially efficient vehicles in that they repeatedly feed into a manufacturer's CO2 balance. For example, vehicles that emit less than 50 g of CO2 per kilometre (this corresponds to a consumption of approx. 2.15 litres of petrol or 1.9 litres of diesel per 100 kilometres), will be counted twice in the 2020 fleet consumption. In 2021, they will be counted 1.66 times and in 2022 1.33 times. Thereafter, super credits are no longer awarded.

11. And what do the so-called eco innovations refer to?

The eco innovations are designed to take into account technologies that have more effect in customers' individual consumption than in the WLTP consumption cycle. Exhaust heat recovery and solar roofs are listed in the regulation as examples of eco innovations. In total, the eco innovations are rewarded with up to 7 g/year reduction in CO2 emissions.

12. Which fleet targets apply worldwide?

One of the goals originally planned by the legislation for the new standard WLTP (Worldwide Harmonized Light Vehicles Test Procedure) was not achieved. As the name itself suggests, the procedure was meant to apply worldwide to ensure comparability and transparency across all manufacturers and countries. As a result, the WLTP currently applies across Europe - other countries are successively following suit. In the important markets of China and the US, different standards and measuring procedures are in place to some extent. The WLTP will also be introduced in China from 2020. The fleet targets are also defined differently and are therefore not directly comparable. According to the respective local standards, approximately converted to grams of CO2 per kilometre, in the US 132 g/km and in China 120 g/km are stipulated. Nevertheless, there is only one trend globally when it comes to CO2 emissions as well as other emissions: a downward trend.