CO2 Tailpipe Emissions Sink to All-Time Low in U.K.

Average carbon-dioxide emissions by new cars in the U.K. fall to an all-time low of 124.6 g/km, 4.2% below this year’s European Union-wide target of 130 g/km.

The Society of Motor Manufacturers and Traders says a record 68.6% of car buyers now are paying zero first-year taxes as carbon tailpipe emissions fall for the 17th consecutive year.

The annual SMMT New Car CO2 Report shows tailpipe emissions beat the record average set in 2014 by 2.9% and 2007 levels by 24%.

The shift to more-efficient diesel and gasoline engines has been critical to this success, along with significant growth of the alternatively fueled vehicles market. Sales of plug-in vehicles increased fourfold to 14,498 in 2014 and, for the first time, the U.K. registered more new plug-ins than any other European country.

SMMT CEO Mike Hawes says the U.K. automotive sector has made enormous strides in cutting emissions.

“However, there is a long way to go, and meeting ambitious targets in 2020 will require ongoing support and investment,” he says in a statement. “Striking the delicate balance between influencing buying behavior, encouraging investment and maintaining critical tax income will be a big challenge.”

SMMT says that by the end of 2014, there were 52,000 AFVs, including hybrid, plug-in and extended-range vehicles, on U.K. roads – up 58.1% from 2013.

The report shows that in 2014, 68.6% of new cars met or fell under the 130-g/km EU threshold, compared with just 0.9% in 2000, with buyers of these cars benefiting from the zero first-year vehicle-excise-duty rate.

However, SMMT says this success raises questions about the future of taxation and incentives in the U.K. – questions that will be a priority for the next government.

It cites a report by the Center for Economics and Business Research, which explores the challenges ahead in sustaining long-term reductions in CO2 while also continuing to deliver sufficient revenue to government.

With a strict new EU-wide CO2 target of 95 g/km by 2020, much is at stake, and the CEBR report recommends a moderate and fair approach to reform to avoid undermining future uptake of the newest, cleanest cars. Demand for these vehicles must be maintained, alongside support for the development of the next generation of low-carbon technology.

SMMT is calling on the next government after the May 7 general election to work closely with industry when it reviews motoring taxation policies, to ensure balance, fairness and stability in the market and to reflect industrial-strategy ambitions.

Since 2014, the government has given more than £500 million ($767 million) to promote ultra-low-emissions vehicles of all types.