The plan sets tough emission targets for 2020 and beyond. Although 10 years is usually considered to be beyond the boundary for business planning, there are good reasons to bring forward consideration about how these curbs will affect policy areas, such as cars, which are closely linked to CO2 emissions.
According to the plan, fleet purchases in 2020 will have to conform to an average of 95g/km of CO2. To put that in context, the average new car sold last year emitted nearly 70% more CO2 than that. Only seven out of 3,500 car models currently available in the UK would meet the 2020 standard.
In today's terms, meeting the 2020 target would mean swapping, say, a two-litre, 140bhp Ford Mondeo for a 799cc Smart Fortwo Coupé. Yes, fleets still have 10 years in which to tackle this issue but employers should bear in mind that, for the average company car driver, this timescale represents only two or three changes of vehicle.
The car manufacturers are already working hard to meet the challenge of delivering all the working qualities of a car like the Mondeo in a package with the CO2 emissions of the Smart. The greenest Mondeo is already down to 139g/km. BMW's newly-announced 320d Efficient Dynamics model has lowered the CO2 bar in the Upper Medium class to 109g/km.
With 163bhp on tap, the new 320d ED is also a far cry from the kind of small-engined, ultra-compact-sized unit that, I daresay, most drivers tend to think of as typical low- carbon vehicles.
Businesses need to educate drivers on this question. Current sub-100g/km cars are still, in the main, small and not well suited to long distances. At the same time, the mass media naturally focuses on high-tech developments in alternative engine and drive train technologies.
It's easy for drivers to stick with their existing habits and preferences in the belief that someone will come up with a magic bullet solution in a few years. In fact, the Government doesn't expect electric cars, plug-in hybrids or fuel-cell vehicles to start making a significant impact much before 2030.
Obviously, it is better for businesses to look, sooner rather than later, for ways to achieve a smooth transition to a lower carbon car policy. The price of leaving it too late could prove painful. Businesses' overall energy costs will rise steeply over the next decade, along with carbon taxes levied on fuel and employee benefits.
Fortunately, the range of new options open to employers is growing. Innovative funding solutions such as Motivational Leasing, which take advantage of the tax breaks on low-CO2 cars, will help to win over employees. Meanwhile, we are already seeing cars with the potential to meet tomorrow's tough emissions targets with very little, if any, diminution in the qualities that make today's conventional versions attractive to job-need and perk drivers alike.
Mark Sinclair is director at Alphabet
