Fleet News

CO2 saving claim disputed

The UK could save hundreds of thousands of tonnes of carbon dioxide emissions if employees who opted out of company car schemes got back into a company car, a leading professional services provider has claimed.

According to KPMG, since 1999 there has been a decline in the number of company cars, with Her Majesty’s Revenue and Customs figures indicating 400,000 employees have opted out in preference of purchasing their own vehicles.

KPMG suggests that 52% of employees who opt for cash instead of a company car use the money to purchase a second-hand car, with emissions estimated at 30 to 40g per kilometre higher than the average company car.

However, this estimate is disputed: “The assumption that employees who opt out will be driving a 191g/km vehicle does not appear to be backed up with any evidence,” said Alastair Kendrick, partner at Bourne Business Consulting.

“It is much more likely that drivers opting out of company cars would buy a car under three years old and thus the CO2 emission is likely to be significantly below 191g/km.”

But it is apparent that grey fleet vehicles could be more polluting and have less safety features than newer company cars.

Research conducted by fleet consultants GFleet found that the average age of grey fleet vehicles is now 6.3 years, compared to company vehicles where the average age is 1.5 years.

It also found that the proportion of grey fleet cars running on petrol versus diesel is 71% compared to company cars, where the proportion is 54%.

Now KPMG says that if the 400,000 employees who opted out of company cars over the past few years decided to opt back in, the UK would save total annual CO2 emissions of 301,000 metric tonnes.

Again Mr Kendrick disputes the KPMG claim, suggesting that the savings would be in the region of 58,000 tonnes.

He says there is a mistaken assumption that grey fleet drivers cover the same mileage as company car drivers.

“The problem for KPMG and HMRC and everybody else looking at this area is that there is no reliable record of levels of business mileage by employees using their own car,” he said.

“I would though expect the average mileage for those opting out to be far lower than 18,000 and more likely six to 7, 000.”

The BVRLA, whose members supply the majority of company cars, says that only with appropriate management can fleet CO2 emissions be reduced.

“This can be done either in-house or through a service provider with fleet management, contract hire or ECOS products as an increasing number are doing,” explained BVRLA spokesman, Robin Mackonochie.

“Only then can they put in place a policy to manage downwards their CO2 emissions, which will save money for both themselves and their employees.”

It is also expected that the number of company cars will increase following the budget, which will allow for a much lower 10% BiK tax charge in respect of vehicles that emit 120g of CO2 per kilometre or less.

For those companies looking to move back to supplying vehicles, Mr Kendrick offers this advice: “Employers need to model the costs and work out the most beneficial funding option and then consider the benchmark car and how green that policy is to be.

"We would strongly recommend those looking at this area take independent advice.”
 

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