The report, produced by the UK Petroleum Industry Association (UKPIA), also revealed that consumers find alternative fuels either too costly or impractical to get on to their fleets, putting a question mark over the future viability of greener fuels.
The report, entitled 'Future Road Fuels', examines the options for low carbon road fuels and technology. It suggests that for any green fuel to have a substantial impact on UK roads, several factors including consumer behaviour need to change.
Ken Rivers, president of the UKPIA, said: 'The UK oil industry recognises the need to reduce CO2 emissions from road transport. Cleaner fuels have the potential to help more efficient conventionally-fuelled vehicles meet all of the CO2 reductions expected from UK road transport by 2020.
'However, looking towards 2050, there are many routes to achieving the Government's targets for lower carbon emissions and there is a danger in prematurely picking winners from among new fuels or technologies.
'The near term options include improved vehicle efficiency, traffic reduction measures, conventional biofuels and in the future advanced biofuels and hydrogen used in fuel cell vehicles. Consumer behaviour is also likely to be a significant factor, both in choice of vehicle and fuel. To date consumers have tended not to take up new cleaner fuels if they cost more than existing ones.'
The Government wants to reduce CO2 emissions by 60% by 2050. Reductions are based on 1990 figures and under the Kyoto Protocol the Government is aiming for a 20% reduction by 2010.
However, the report claims that 'continuously improving the efficiency of conventionally-fuelled vehicles could contribute to all of the CO2 reductions expected from the road transport sector to 2020.'
The report cites problems such as production, infrastructure, changes to the car parc and environmental impacts as factors for holding back the development of biofuels and hydrogen.
Nick Owen, a senior manager of technology at engineering consultant Ricardo, believes current environmentally-friendly engines can help pave the way for greener alternatives.
He said: 'Advanced developments of what is considered conventional automotive technology can still offer significant reductions in real-world energy use and greenhouse gas emissions.
'Examples are advanced, clean diesel engines, some new efficient petrol engine concepts and various forms of hybrid vehicle. In the medium term these technologies are a good choice for consumer, industry and the environment because they will evolve out of today's vehicles, which reduces risk. These new technologies can then continue to evolve towards a longer term goal of more sustainable transport.'
At a recent meeting between fleet executives, the Energy Saving Trust and leading industry figures, it emerged that drivers want alternatively-fuelled vehicles, but only if they don't cost more. The meeting concluded that there must be an incentive to opt for the greener alternative.
According to the Energy Saving Trust (EST), the fleet sector has saved more than £42.5m since 2002 by implementing Transport Energy's BestPractice efficiency methods.
In 2003/2004, EST allocated grants totalling £20.91 million to encourage companies to fit emission-reducing equipment to diesel vehicles, or switch to alternative clean-fuel cars and commercial vehicles. (Fleet NewsNet, July 1)
CO2 emissions are one of the main focal points for the debate on the future viability of alternative fuels and a report published this month by the World Health Organisation (WHO) will back the case for greener alternatives.
The report, called 'The Effects of Air Pollution on Children's Health and Development: A Review of the Evidence' shows a link between exposure to air pollution and infant deaths, childhood and adult repiratory diseases. It also claims that air pollution can affect unborn babies.
A spokesman at WHO, said: 'The authors of the report conclude that this knowledge is sufficient for a strong recommendation to reduce children's current exposure to air pollutants, particularly those related to traffic.'
The report claims that emissions from transport need to be reduced through legislation and regulation.
The spokesman added: 'In particular, economic incentives are proposed for car manufacturers, to make drastic reductions in emissions of particles from diesel motor vehicles.'