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The Tall Tale of Climate Progress

No money from companies or governmentsGreenpeace is an international environmental organization which uses non-violent direct action to protect the capacity of our planet Earth to nurture life in all its diversity. Our goal is to prevent environmental destruction, change behavioural patterns and advance solutions. Greenpeace is above party lines and completely independent of governments, political parties and industry. Over 600,000 people in Germany support Greenpeace financially, thereby ensuring that we can continue our daily work to protect the environment, and promote peace and international understanding.

How Volkswagen, Daimler and BMW use accounting tricks and loopholes to tweak their European CO2 emissions figures

Authors: Benjamin Stephan und Benjamin GehrsHamburg, March 2021

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1. Introduction

Once upon a time there was a number: 95. That‘s how many grams of CO2 new cars were still supposed to be allowed to emit per kilometer in 2020. That average value was set by the EU and its member states back in 2008.1 At the time, this target value was meant to ensure that carmakers would make step-by-step progress in climate protection over the next twelve years. But it was not until late 2013 that stakeholders decided how to achieve this goal and which rules should apply. In March of that same year, the Greenpeace campaign “VW: The Dark Side” culminated in a meeting between VW CEO Martin Winterkorn and Greenpeace Executive Director Brigitte Behrens. At the meeting, Winterkorn declared his clear commitment to the EU target: “I guarantee that we will do everything we can to lower CO2 emissions to 95 grams with no ifs or buts.”2

The year this decision was made, the target seemed ambitious. In 2008, average CO2 emissions from new cars in the EU was at 153.5 grams according to NEDC test cycle consumption figures. The target value for 2020 called for a reduction of almost 40 percent.3

And in fact, German carmakers were able to deliver good news in January this year. Both Daimler and BMW declared that they had achieved their fleet targets for 2020. The VW Group, however, had to admit that it had narrowly missed its target. But still: only by half a gram.4

A closer look at 2020 figures is sobering. The 95-gram claim turns out to be a purely fictitious value. It has nothing to do with the actual CO2 emissions of new cars. Volkswagen and others have made use of a lot of “ifs and buts.” Taking advantage of loopholes in CO2 legislation and in the rules for test bench measurements, most manufacturers have managed to meet EU targets without significantly reducing their cars’ actual fuel consumption to levels below those of the 2000s.

It was not ingenious engineering that made this magical CO2 reduction possible, but hard lobbying. Thanks to their efforts, German carmakers could be

sure of the German government‘s support in adding more and more new loopholes. In May 2013, when the conditions for achieving the 95-gram target were being discussed, Chancellor Angela Merkel (CDU) managed to get each battery electric car and plug-in hybrid to be counted several times as zero-emissions vehicle—which is exactly what German carmakers wanted.5

But it didn’t stop there. In June 2013, the German government, under pressure from the German car lobby, prevented a final vote in the EU Council of Ministers. Just before, the president of the German Association of the Automotive Industry (VDA) at the time, Matthias Wissmann, had sent the chancellor a letter beginning with „Dear Angela“ in which he urged her to advocate further „improvements” at the EU level.6

Subsequently, a so-called phase-in provision was adopted for 2020. It allows manufacturers to initially exclude the five percent of their own fleet with the highest emissions when calculating the fleet’s average CO2 emissions.7 Ninety-five grams “with no ifs or buts” was thus off the table. German carmakers had once again gotten their way—and with it a free pass to use tricks to minimize the CO2 emission figures for their cars instead of actually lowering them.

Greenpeace has long criticized the power wielded by climate-damaging manufacturers such as Volkswagen.

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The German car lobby in particular has succeeded in pushing through a total of five loopholes in European CO2 legislation. In addition to the phase-in provision (Chapter 3.2) and supercredits for low-emission cars (Chapter 3.3), loopholes include readjusting the target value based on vehicle weight (Chapter 3.1), additional credits for so-called eco-innovations (Chapter 3.4), and the possibility of pooling with other manufacturers (Chapter 3.5). Moreover, the calculation also takes into consideration new registrations in Norway and Iceland; another development that benefits carmakers (Chapter 4).8

Aside from their purely numerical effects, these loopholes result in substantially higher CO2 emissions for all three German manufacturers. Thanks to pooling, supercredits and other loopholes, Volkswagen was able to soften its 2020 CO2 emissions target by 16 grams, and BMW by as much as 22 grams. On paper, Daimler was able to display even greater climate

Figure 1: Effect of various loopholes in the European Union’s legislation on the CO2 fleet targets of German manufacturers.

progress— a total of 27 grams (see Figure 1)—due mainly to its heavier vehicles.

But backdoors in the EU’s legislation on the CO2 fleet average are not the only problem. There are also loopholes in the roller bench measurements used to determine standard fuel consumption, allowing carmakers in recent years to lower their cars’ CO2 emissions on paper without having to change the design of their models or forge ahead with electrification.

A mandatory CO2 target for new cars in the EU was being discussed in 2007, if not earlier, and regulation was introduced in 2009. Faced with the challenge of significantly reducing fuel consumption in new cars, manufacturers began to systematically exploit loopholes in the regulations for official vehicle testing procedures. They began to optimize new car models to achieve excellent results on the roller bench.

2. The Result: Impressive Emissions Figures and Massive Damage to the Climate

2.1 Fleet averages show scant progress

NorwayPoolingEco-

innovationSupercredits Loophole

0,5 g2 g 4 g 7,5 g 1 g

0 g

0 g

11 g 6 g 7,5 g 2 g

1 g

0,5 g

0,5 g7 g 5 g 7,5 g 2 g 22 g total

27 g total

16 g total

Weight factor

Chapter 3.1

Chapter 3.2

Chapter 3.3

Chapter 3.4

Chapter 3.5

Chapter 4

Phase-in

=

=

=

+

+

+

+

+

+

+

+ +

++

+ + + +

Red alertRed Alert

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This strategy was successful in lowering the CO2 emissions of new cars on paper. At the same time, the gap between official and real-world fuel consumption and CO2 emissions increased significantly: from eight percent in 2001 to an average of 39 percent in 2017. The discrepancy in VW vehicles has been somewhat less marked recently (35 percent), but it was higher than average for Daimler (46 percent) and BMW (43 percent).9

With the surge in the number of plug-in hybrids among new cars in 2020, this discrepancy is reaching new levels. On average, the real consumption of these hybrids is 100 to 300 percent higher than their official consumption data (Chapter 5).

Figure 2: Fleet targets, officical and actual CO2 emissions of German manufacturers in comparison.

97 g*

* This is the target of the VW-SAIC and others pool

113 g

156 g

106 g

114 g

175 g

102 g

112 g

168 g

Nearly double on the road

0 50 100 150

95-g target

Manufacturer-specific target

CO2 fleet average according to NEDC

Real world CO2 emissions

The gap between CO2 emissions on the test bench and on the road has been growing for years.

Nearly double on the road

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Exploitation of loopholes Test cycle discrepancy

Scant progress on the road

CO2 fleet average according to NEDC

2006

2020

2020

2020

2006

2006

156 g

184 g167 g

113 g

175 g114 g

112 g 168 g

193 g174 g

204 g182 g

- 15%

- 18%

- 9%

Figure 3: Average real world CO2 emissions in grams per kilometer of new cars sold in 2020 in the EU compared to 2006.

Collectively, the loopholes allowed real CO2 emission levels in new cars manufactured by German companies in 2020 to diverge from the 95-gram target by 64 to 84 percent. According to Greenpeace calculations, the average real-world emissions of new cars sold by the VW Group in the EU in 2020 was 156 grams of CO2/km. This translates to 6.7 liters of gasoline consumption per 100 kilometers. BMW‘s real-world fleet average in 2020 was 168 (7.2 liters of gasoline per 100 km), while Daimler‘s was 175 grams of CO2/km (7.5 liters of gasoline per 100 km) (see Figure 2).

Despite improved figures on paper made possible by loopholes, actual fuel consumption in new cars has fallen only slightly over the past fourteen years. Compared to 2006—for which systematically collected data by the European Environment Agency is available10—the real CO2 emissions of an average new BMW car fell by a mere 18 percent, real CO2 emissions of new VW cars fell by 15 percent, while real CO2 emissions of new Daimler cars fell on average by only nine percent (see Figure 3).

Scant progress on the road

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Backdoors are wide open

* EU + UK + Norway + Iceland

2,960,000 750,000 820,000New cars* 2020

15 mtons of

CO2

45 mtons of

CO2

15,1 mtons of

CO2

Figure 4: Additional CO2 emissions due to loopholes exploited by German manufacturers in 2020 for newly registered passenger cars.

While the so-called premium manufacturers Daimler and BMW benefit more greatly from loopholes in terms of lowering their fleet average, the discrepancy between the official data from volume manufacturer VW and its vehicles’ actual CO2 emissions causes the greatest damage to the climate due to the large number of cars it sells.

VW’s exploitation of loopholes and optimization for cycle tests for some three million new cars sold by the group in the EU in 2020 generates an additional 45 million tons of CO2 emissions—based on a vehicle’s lifetime mileage of 200,000 kilometers and its well-to-

wheel emissions. By way of comparison, this is roughly equivalent to the German state of Saxony’s entire annual CO2 emissions.11 Assuming a cost of damage of EUR 180 per metric ton of CO2, the damage to the climate costs EUR 8.1 billion—caused by new cars registered in 2020 alone.

The additional CO2 emissions due to the exploitation of loopholes generated by new cars sold by Daimler and BMW in 2020 amount to 15.1 million tons of CO2 (Daimler) and 15 million tons of CO2 (BMW). The cost of damage to the climate per manufacturer thus amounts to roughly EUR 2.7 billion euros (See Figure 4).

2.2 75 million additional tons of CO2—in 2020 alone

Backdoors are wide open

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The calculations in this paper are based on registration data for the EU, Iceland, Norway and the United Kingdom collected by Dataforce. Registration data includes information on powertrains, vehicle mass and CO2 emissions. This information can be used to calculate fleet emissions on a manufacturer-specific basis without loopholes, as well as to calculate the effects of the weight factor, phase-in, pooling, and the supercredits. The effect of eco-innovations cannot yet be calculated for 2020 as the information needed here is currently available only to the manufacturers themselves, so we have estimated the effects of this loophole based on data from previous years. We were able to calculate the effect of Norway’s inclusion by using registration data from Dataforce and information from Opplysningsrådet for Veitrafikken.12

To determine the effect of the deviation between official and real-world fuel consumption, we used research from the International Council on Clean Transportation (ICCT). It determined the manufacturer-specific deviations from test cycle

values for conventional diesel and gasoline cars for 2017. Volkswagen’s deviation was 35 percent (in 2006: 10 percent), Daimler’s 46 percent (in 2006: 11 percent) and BMW’s 43 percent (in 2006: 12 percent). For plug-in hybrid registrations, we used the latest findings of the ICCT and the Fraunhofer Institute and calculated an average deviation of 200 percent13 for all three groups. This information and the manufacturer-specific registration and emissions data according to powertrain type provided by Dataforce enabled us to calculate the aggregated effect of each of the company’s deviation from test cycle values.

When we calculated the damage to the climate, we took into consideration not just the additional direct emissions (tank-to-wheel) allowed by loopholes. Since additional fuel consumption in relation to official figures also causes additional indirect emissions in the fuel supply chain for e.g. refining and transporting fuel (well-to-tank emissions), this was also taken into consideration. Based on existing research on this topic, we assigned well-to-tank emissions a value of 25 percent of the tank-to-wheel emissions.14

How we calculated

Each year, around 3 million more passenger cars manufactured by the VW Group are registered in the EU alone.

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The automobile lobby softened the 95-gram limit early on and succeeded in asserting different target values for car manufacturers. Assuming an average vehicle weight for all new cars sold, in line with the 95-gram target value, a specific CO2 target is calculated for each manufacturer. This is based on the average weight of new cars sold by the manufacturer, meaning that the heavier a manufacturer’s cars, the laxer its CO2 target.

The weight provision was preceded by massive lobbying, particularly by the German premium automobile manufacturers, who saw the continuation of their model strategies, geared to large and heavy vehicles, threatened. In a strongly worded letter to the EU Commission in January 2007, German carmakers warned of “severe distortions in the automotive and supplier industry.” What was needed, they wrote, was “competitively neutral reduction targets appropriate to the diversity of the European automotive industry.”15 The EU listened to German carmakers, and in its regulation, it justified the provisions by stating that

3. The Loopholes

it was necessary to „maintain the diversity of the car market and its ability to cater for different consumer interests.”16

So instead of providing an incentive for light and fuel-efficient vehicles, however, the calculation of a specific CO2 target indirectly favors the manufacturers of heavy SUVs and large sedans. This loophole is an additional incentive to sell plug-in hybrids. Since their hybrid drive makes them heavier than conventional diesel or gasoline vehicles, they raise the target value, making it easier to achieve.

The specific CO2 targets for the German automakers are all higher than the European target of 95 grams of CO2/km. According to calculations by Dataforce, a provider of automotive data, the target for Volkswagen for 2020 was roughly 97 grams,17 while the BMW Group‘s specific CO2 target was 102 grams. In 2020, Daimler was even allowed a fleet average of 106 grams of CO2/km because its vehicles were even heavier.

VW: + 2 grams Daimler: + 11 grams BMW: + 7 grams

3.1 The weight factor

VW: + 4 grams Daimler: + 6 grams BMW: + 5 grams

Originally, the 95-gram target was to apply to all new cars in 2020. But the German car lobby’s brazen intervention was again successful in softening the measures laid out by the EU and implementation was postponed. It was Chancellor Angela Merkel herself who prevented a final vote on the compromise reached for the 2020 target at the EU in June 2013.

This was preceded by a letter from the president of the German Association of the Automotive Industry (VDA) at the time, Matthias Wissmann, who warned the German government of job losses due to “arbitrary target values.”18 More negotiations followed, with Germany proposing a multi-year phase-in that would have delayed the 95-gram limit until 2024.19 That particular proposal was not adopted, but the car

lobby did manage to ensure that climate protection measures would require significantly less of an effort on the part of manufacturers. The EU decided on a short phase-in period

for 2020, allowing the most climate-damaging five percent of new cars registered to be excluded when calculating a fleet’s average emissions.

This is of particular benefit to carmakers with a wide range of models. Thanks to the phase-in period, mostly high-performance sports cars, heavy SUVs and luxury sedans are not included in calculations. Manufacturers knew how to take advantage of this. Performance brand BMW M, for example, achieved record sales last year, but thanks to the five-percent provision, it did not affect the BMW Group‘s CO2 average emissions.20

3.2 Phase-in

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Benefits provided by the phase-in loophole resulted in a reduction of five grams for BMW and even six grams for Daimler. By excluding the dirtiest five percent of

its fleet, the Volkswagen Group was able to lower its fleet’s emissions average by four grams of CO2 per kilometer.

3.3 Supercredits

During a transitional phase, the EU is granting carmakers an additional incentive to sell electric cars and plug-in hybrids with NEDC emissions of less than 50 grams of CO2/km. Supercredits ensure that these zero and low-emission vehicles are more strongly weighted in CO2 emissions calculations—making it easier to meet the manufacturers’ specific target value for average consumption. A supercredit provision was already in place between 2012 and 2015, and the current incentive is effective for the years 2020 to 2022.21

Under the supercredit provision, new cars with an NEDC value of less than 50 grams of CO2/km counted double when calculating the fleet’s 2020 average. In 2021, the supercredit multiplication factor drops to 1.67, and then to 1.33 in 2022. The effect of the supercredits on fleet emission figures is limited to 7.5 grams.

Here again, it is thanks to the lobbying efforts of German carmakers that supercredits have an enormous impact on fleet emission averages. During the EU’s 2013 negotiations, the German government lobbied on their behalf for a generous supercredit

provision which would have allowed low-emission vehicles registered as early as 2016 to be counted several times.

Although this demand did not go through, carmakers managed to secure an advantage elsewhere. The EU had originally planned to limit the number of vehicles eligible for supercredits to 20,000 per manufacturer. However, this would have had a much smaller impact than the provision now in force.22

In 2020, all German car manufacturers fully exploited the supercredits provision. At Daimler, as well as at BMW and Volkswagen, the double counting of electric cars and plug-in hybrids enabled them to reduce average fleet emissions by 7.5 grams of CO2/km.

The awarding of supercredits for plug-in hybrids in particular has come under fire. There is absolutely no obligation to prove that these vehicles are regularly recharged and therefore emit less CO2 than conventional internal combustion engines. The discrepancies between manufacturers’ claims and real-world fuel consumption are in fact the highest for plug-in hybrids (Chapter 5).

VW: + 7,5 grams Daimler: + 7,5 grams BMW: + 7,5 grams

3.4 Eco-innovations

The EU rewards manufacturers for innovations that contribute to reductions in CO2 which official test cycles (NEDC/WLTP) are unable to measure. These eco-innovations can reduce the CO2 fleet value of carmakers by up to seven grams. So far, eco-innovations have played only a limited role. In 2019, they enabled Daimler to cut its fleet’s CO2 value by 0.7 grams, and BMW by 0.9 grams.23

Eco-innovations are general ly expected to have a greater impact on carmakers‘ CO2 emissions as of 2020. Transport & Environment estimates that thanks to eco-

innovations Daimler and BMW were able to reduce their CO2 emissions by 2.5 grams last year and the Volkswagen Group by 1.5 grams.24 The figures depend on the number of vehicles equipped with eco-innovations that are actually registered. This is

VW: + 1 grams Daimler: + 2 grams BMW: + 2 grams

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monitored by the European Environment Agency (EEA), which is also responsible for collecting the data needed to calculate the exact impact of eco-innovations. Their effect can therefore be determined only when the EEA publishes its data on new European car registrations in the summer of 2021.

Eco-innovations approved by the EU Commission for manufacturers and suppliers include features such as LED lights, solar panel car roofs, and the coasting function, which forces the engine into idle mode in certain situations to save fuel. Eco-innovations must be new (in 2009, market penetration had to be less than three percent), statistically demonstrable (at least 1 g/km) and not dependent on driving behavior.

German manufacturers had originally pressed for even greater recognition. In its policy letter of December 2012, in reference to eco-innovations, the VDA complained that the European Commission was being “too restrictive and bureaucratic when it comes to counting them towards the CO2 emission figures.”25

That same year, the VDA also made its position clear to the German Federal Ministry of Economics, where it lobbied, among other things, on the scope of eco-innovations.26 Apparently, the VDA succeeded in pushing through at least one point: namely that eco-innovations included technologies that could be switched off by the driver.

However, this is a particular point of concern among experts, who also have reservations about other points. The manufacturers themselves provide the data required, and there is also no mechanism to retroactively review their assumed reductions. In the case of the coasting function, for example, it is unclear if and how the fact that in many cars this feature is not active in all driving modes, is considered in the calculation. With regard to eco-innovations, the ICCT was already calling for strict monitoring in 2018 and warned of possible „adverse effects“ on the strategy to reduce CO2 emissions from new cars.27

Car manufacturers are allowed to team up and act jointly to meet the EU‘s CO2 targets. This so-called pooling allows carmakers with a high fleet emissions average to avoid penalties by offsetting their balances against particularly clean manufacturers. Ford and Volvo, for example, have formed such a pool, as have Mazda and Toyota. A current overview of all pools can be found on the EU website.28

A prominent example is the pool formed by Fiat Chrysler (FCA) and the electric carmaker Tesla.29 Honda also joined the pool last year.30 According to the Financial Times, FCA paid Tesla hundreds of millions of dollars for the deal. Manager-Magazin called it a “dirty CO2 deal,”31 as joining the pool allowed Fiat Chrysler

to avoid hefty penalty payments to the EU without having to make any improvements to its own fleet.

One of Germany’s three leading carmakers also benefited from the controversial pooling provision last year: Volkswagen teamed up with a number of smaller car companies in 2020. First, the VW Group and SAIC created a pool.32 Later in the year, electric car manufacturers Aiways, LEVC and Next.e.Go joined in.33 Although the number of cars produced by the companies in the pool is relatively small, Volkswagen reported that this collaboration lowered its emissions by about half a gram.34 This means that VW avoided paying penalties amounting to roughly EUR 140 million euros. VW has not provided any information on compensation payments.

VW: + 0,5 grams Daimler: – BMW: –

3.5 Pooling

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Not a loophole, but a development welcome to carmakers was the expansion of the EU regulation on CO2 fleet limit values to include Norway and Iceland. While Norway, with 141,412 new registrations, and Iceland, with 9,368 new registrations, represent only a small portion of the European car market—the EU, Norway and Iceland together recorded about 11.7 million new registrations in 2020—the two countries boast an extremely high number of new electric car registrations. In Norway, 54 percent of new cars registered in 2020 were fully electric and 20 percent were plug-in hybrids.35 In Iceland, 25 percent of new cars registered in 2020 were fully electric and 20 percent were plug-in hybrids.

The inclusion of these well-developed electric car markets played into the hands of car manufacturers in achieving their targets. Although Norway accounts for only about one percent of the European car market,

4. The Norway Effect

VW: + 1 grams Daimler: + 0,5 grams BMW: + 0,5 grams

its share of battery electric vehicles (BEV) registered in the EU, Norway and Iceland in 2020 was 11 percent. The European manufacturers‘ association ACEA denied that it had

specifically lobbied for Norway’s inclusion, which has been in effect since 2019.36

Manufacturers that have sold a relatively large number of electric cars in Norway have benefitted the most. This applies to the Volkswagen Group, one of Germany’s three major car manufacturers. In 2020, it sold more than 27,000 BEVs in Norway alone—about 15 percent of all VW’s new BEV registrations in Europe. Without Norway, the Volkswagen Group‘s average fleet emissions for 2020 would be about one gram higher. About eight percent of Daimler‘s European BEV sales and about seven percent of BMW‘s European BEV sales were registered in Norway. Without this Scandinavian country, the average fleet emissions of each group would have been about half a gram higher.

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5. Discrepancies Between Test Cycle and Real-world Emissions

According to data provided by the European Environment Agency (EEA), average CO2 emissions from new cars in Europe have fallen significantly since the turn of the millennium—even when supercredits, eco-innovations and other loopholes are not considered. According to the EEA, the average new car emitted 172 grams of CO2 per kilometer in 2000; by 2019, that figure had dropped to 122 grams.37 There is, however, a problem with the alleged decrease in consumption of nearly 30 percent: it can only be measured on the test bench.

The International Council on Clean Transportation (ICCT) first showed in 2013 that the discrepancy between official test consumption performance and real-world consumption performance is growing. In its most recent update in 2019, ICCT analyzed the data for some 1.3 million vehicles from 15 sources. Its most important finding: for cars built in 2001, real-world consumption performance deviated from NEDC test cycle figures by an average of eight percent. For cars built in 2017, real-world consumption was 39 percent higher than consumption data published by manufacturers. The gap between official and real-world fuel consumption performance for VW vehicles, at 35 percent, was slightly lower than the average figure, but it was higher for premium manufacturers BMW and Daimler. For BMW, the gap between official and real-world fuel consumption was 43 percent in 2017, and for Daimler, it was as large as 46 percent.38

With the impending regulation of CO2 emissions from new cars by the EU in mind, manufacturers began to optimize their cars in the 2000s—not for the road, but for test procedures on the test bench. New engines, for example, were downsized, with engineers reducing engine displacement. Downsizing was carried out in combination with other technical measures (such as increasing pressure) intended to compensate for the loss of power caused by reduced engine displacement.

The advantages in efficiency resulting from downsizing are particularly effective in the part-load range and are therefore disproportionately represented in the NEDC test cycle, which is far removed from real-world driving conditions. In reality, a number of disadvantages

VW: + 43 grams Daimler: + 61 grams BMW: + 56 grams

resulting from the downsizing trend can be observed, such as increased pollutant formation and in some cases even higher consumption under full load on the highway.39

In addition, carmakers systematically exploited all loopholes in the legislative text to obtain the best possible results in the test procedure. In 2013, a report by Transport & Environment listed some of the most common tricks, from the use of special low-rolling-resistance tires and an earlier shifting into higher gears to the sealing of car body joints to optimize air resistance.40

Actual progress in the fuel efficiency of internal combustion engines, on the other hand, did not lead to lower real-world consumption. The reason: Manufacturers used improved fuel efficiency to compensate for the increase in size and more powerful engines in new models. The average weight of new cars in the EU rose by 12 percent from 2001 to 2019, also thanks to the popularity of SUVs. The average horsepower of new cars increased even more and was roughly 37 percent higher in 2019 than in 2001.41

Plug-in hybrids (PHEVs) play a special role in the difference between real-world fuel consumption and test consumption. These cars have a combination of internal combustion engine and electric powertrain, making them extremely fuel efficient on paper and therefore an important element in many manufacturers‘ efforts to meet their CO2 targets. German carmakers are focusing on PHEVs, particularly for their SUV models, thus offsetting—at least on paper—the disadvantages caused by the higher weight and fuel consumption typical of these types of cars.42

In 2020, the share of plug-in hybrids among all new cars in Europe rose to more than five percent. At Daimler, it was particularly high at 14.8 percent. At BMW, the PHEV share was 12.1 percent, and at the Volkswagen Group, 4.9 percent. One of the reasons for this success is the company car incentives in important markets like Germany’s. Here, employees only have to pay tax on 0.5 percent of the gross list price of a PHEV as a non-cash benefit, compared to

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one percent for a company car with a conventional powertrain.

However, hybrid drives have been criticized for years because real-world fuel consumption is usually many times higher than test bench performance. In 2020, a data analysis of more than 100,000 PHEVs conducted by the Fraunhofer ISI Institute and the ICCT concluded that real-world fuel consumption and thus CO2 emissions are two to four times higher than test cycle results. In privately owned vehicles, real-world CO2 emissions exceeded manufacturers’ NEDC claims by 200 to 240 percent, and in company cars, real-world emissions exceeded manufacturers‘ claims by as much as 205 to 295 percent.43

Assuming an average divergence of 200 percent, a Volkswagen Group plug-in hybrid registered in 2020 did not emit 45 grams of CO2 per kilometer, as stated on paper, but 135 grams. Accordingly, Daimler‘s plug-in hybrids averaged 111 grams of CO2/km (as

Greenpeace demonstrates for the phase-out of the internal combustion engine, IAA 2017.

opposed to 37 g/km), and BMW‘s plug-in hybrids emitted an average of 120 grams of CO2/km (as opposed to 40 g/km).

The car lobby has successfully learned how it can continue to exploit the weaknesses of the NEDC test cycle in the future. From 2021 on, the new, more realistic WLTP test cycle will be used to calculate a fleet’s average CO2 emissions, but the manufacturers’ specific targets will be adjusted to NEDC levels using a conversion factor. This is a point that manufacturers and their associations had always lobbied for.44

The CO2 target might be softened even further by introducing WLTP due to the conversion required. Experts are concerned that manufacturers may have deliberately declared the NEDC and WLTP values, on which the conversion factor is based, as being particularly low for NEDC, or high for WLTP, to optimize the factor.45 As a result, real emissions would decrease even more slowly.

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Plug-in hybrids are vehicles with internal combustion engines, which generally offer no real advantages over conventional internal combustion engines. The discrepancies between manufacturers’ claims and real-world consumption levels are significant.

6. Greenpeace Demands

Any form of preferential treatment of plug-in hybrids, such as multiple crediting thanks to supercredits and privileges in the form of low company car taxation, must be discontinued.

The mandatory phase-out of internal combustion engines.

To achieve its new ambitious climate targets, the EU wants to revise CO2 fleet targets again this year. The Commission will present a proposal by June 2021. This report shows that the CO2 standards have failed to prevent carmakers from aggravating the climate crisis. The EU must introduce a European-wide legally

binding phase out for new cars and vans with internal combustion engines, including hybrids, by 2028 at the latest. The EU must also allow Member States to move ahead with earlier legally-binding phase out dates and Germany should phase out the internal combustion engine by 2025.

No loopholes in CO2 targets for fleets.

The emission reduction target for 2025 must be raised significantly, additional annual steps defined, and all loopholes closed. The weight factor, supercredits, eco-innovations and pooling should all be eliminated immediately. Deviations—including those in the new

WLTP test cycle—from real-world consumption must be taken into consideration when targets are defined, or the test cycle must be replaced by a more accurate one (such as the cycle used by the U. S. Environmental Protection Agency).

No further preferential treatment of plug-in hybrids.

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1 https://www.bmu.de/fileadmin/bmu-import/files/pdfs/allgemein/application/pdf/eu_verordnung_co2_emissionen_pkw.pdf

2 https://www.greenpeace.de/presse/presseerklaerungen/ volkswagen-und-greenpeace-bekraeftigen-strikte-co2- grenzwerte-fuer

3 https://www.eea.europa.eu/data-and-maps/indicators/ average-co2-emissions-from-motor-vehicles/assessment-1

4 https://www.volkswagen-newsroom.com/de/pressemitteilungen/e-offensive-greift-volkswagen-konzern-senkt-co2-flottendurchschnitt-in-der-eu-deutlich-6765

5 https://www.sueddeutsche.de/wirtschaft/konferenz-zur-elektro-mobilitaet-merkels-geschenk-fuer-die-autoindustrie-1.1682234

6 https://www.zeit.de/auto/2013-06/co2-grenzwert-autoindustrie-lobby

7 https://theicct.org/sites/default/files/publications/ICCTupdate_EU-95gram_jan2014.pdf

8 https://www.spiegel.de/auto/aktuell/norwegen-elektroautos-verbessern-co2-bilanz-in-der-eu-a-1250384.html

9 https://theicct.org/sites/default/files/publications/Lab_to_Road_2018_fv_20190110.pdf

10 https://ec.europa.eu/commission/presscorner/detail/en/MEMO_07_597

11 http://www.statistikportal.de/de/ugrdl/ergebnisse/gase/co2

12 https://s3-eu-west-1.amazonaws.com/opplysningsraadet-for-veitrafikk/images/Bil%C3%A5ret-2020-fakta-og-trender-adm.-direkt%C3%B8r-%C3%98yvind-Solberg-Thorsen-OFV.pdf

13 https://www.isi.fraunhofer.de/content/dam/isi/dokumente/cce/2020/PHEV_ICCT_FraunhoferISI_white_paper.pdf

14 https://innovationorigins.com/producing-gasoline-and-diesel-emits-more-co2-than-we-thought/

15 https://www.presseportal.de/download/document/66133-brief-an-eu-kommission-01-07.pdf

16 https://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L: 2009:140:0001:0015:DE:PDF

17 Das Ziel gilt für den von VW mit SAIC und weiteren Herstellern gebildeten Pool (siehe Kapitel 3.5)

18 https://www.sueddeutsche.de/wirtschaft/deutschland-gegen-strengere-co2-grenzwerte-das-dreisteste-was-ich-in-acht-jahren-bruessel-erlebt-habe-1.1707369

19 https://theicct.org/blogs/staff/eu-co2-standards-thriller- continued

20 https://www.press.bmwgroup.com/deutschland/article/detail/T0324477DE/bmw-m-gmbh-setzt-wachstumskurs-auch-2020-fort:-weltweit-144-218-fahrzeuge-ausgeliefert

21 https://ec.europa.eu/clima/policies/transport/vehicles/cars_en

22 https://www.deutschlandfunk.de/etappenerfolg-fuer-die- deutsche-autoindustrie.769.de.html?dram:article_id=236423

23 https://theicct.org/sites/default/files/publications/MarketMonitor EU-jan2021.pdf

24 https://www.transportenvironment.org/sites/te/files/ publications/2020_10_TE_Car_CO2_report_final.pdf

25 https://www.vda.de/dam/vda/publications/1355932186_de_839546137.pdf

26 https://www.bmwi.de/Redaktion/DE/Downloads/U/ umweltinformationen-teil1.pdf?__blob=publicationFile&v=1

27 https://theicct.org/sites/default/files/publications/EU_Eco_ innovations_Briefing_20180712.pdf

28 https://circabc.europa.eu/sd/a/c616f73f-9c3f-49ee-8f27-8b081d3212b7/M1%20pooling%20list%2001.01.2021.pdf

29 https://www.ft.com/content/7a3c8d9a-57bb-11e9-a3db- 1fe89bedc16e

30 https://www.electrive.net/2020/11/02/honda-tritt-co2-pool- von-tesla-und-fca-bei/

31 https://www.manager-magazin.de/unternehmen/autoindustrie/fiat-chrysler-beseitigt-sein-co2-problem-mit-schmutzigem-deal-mit-tesla-a-1262049.html

32 https://www.wiwo.de/unternehmen/auto/gemeinsam-sparen-das-steckt-hinter-dem-co2-pooling-der-autobauer/26204776.html

33 https://www.electrive.net/2021/01/15/vw-erweitert-co2-pool-um-drei-e-hersteller/

34 https://www.volkswagen-newsroom.com/de/pressemitteilungen/e-offensive-greift-volkswagen-konzern-senkt-co2-flottendurchschnitt-in-der-eu-deutlich-6765

35 https://s3-eu-west-1.amazonaws.com/opplysningsraadet-for-veitrafikk/images/Bil%C3%A5ret-2020-fakta-og-trender-adm.-direkt%C3%B8r-%C3%98yvind-Solberg-Thorsen-OFV.pdf

36 https://www.spiegel.de/auto/aktuell/norwegen-elektroautos-verbessern-co2-bilanz-in-der-eu-a-1250384.html

37 https://www.eea.europa.eu/data-and-maps/daviz/average-emissions-for-new-cars-6#tab-chart_1

38 https://theicct.org/sites/default/files/publications/Lab_to_Road_2018_fv_20190110.pdf

39 https://www.heise.de/autos/artikel/Klartext- Die-Optimierung-auf-den-NEFZ-ist-schlecht-fuer-uns- Fahrer-3611055.html?seite=all

40 https://www.transportenvironment.org/sites/te/files/publications/Real%20World%20Fuel%20Consumption%20v15_final.pdf

41 http://eupocketbook.org/wp-content/uploads/2020/12/ICCT_Pocketbook_2020_Web.pdf

42 https://www.greenpeace.de/sites/www.greenpeace.de/files/publications/i04691_mobilitat_flyer_plug-in-hybride_2020_v6_002_0.pdf

43 https://www.isi.fraunhofer.de/content/dam/isi/dokumente/cce/2020/PHEV_ICCT_FraunhoferISI_white_paper.pdf

44 https://www.bmwi.de/Redaktion/DE/Downloads/U/ umweltinformationen-teil1.pdf?__blob=publicationFile&v=1

45 https://theicct.org/sites/default/files/publications/On-the-way-to-real-world-WLTP_May2020.pdf

Sources