Real Driving Emissions 2 | Update
This January marks the point at which all new models of diesel and petrol cars brought to market must comply with the more stringent Real Driving Emissions 2 (RDE2) test limits. Existing models are not obliged to meet the laboratory test limit of 80mg/km of nitrogen oxides (NOx) until January 2021.
As a reminder, RDE2 testing is an element of the overall WLTP (Worldwide Harmonised Light Vehicle Test Procedure) certification process, which tests cars on real roads in real driving conditions. These tests are in addition to the WLTP’s laboratory assessments. Under RDE2, cars are only permitted to emit 1.43 times the laboratory limit when tested on the road. Cars meeting the standard are labelled Euro 6d. For more information on WLTP and RDE see our previous blog post.
The reason that this new testing regime is so important for company car drivers and fleet decision-makers is that pure diesel (not diesel-hybrid) cars not meeting Euro 6d attract the 4% company car tax diesel surcharge. This is one of the factors that has contributed to the massive decline in diesel registrations over the last year. SMMT figures1 show that diesel’s new car market share dropped from 31.5% in 2018 to just 25.2% in 2019, a fall of some 162,844 registrations.
Until recently there were very few Euro 6d diesel models on the market, but manufacturers are now offering over 150 model variants across a wide range of vehicle types and price points, starting at just under £20k for the Vauxhall Astra 1.5 Turbo D SE 105PS, to well over £60k for the Mercedes GLE 400 d AMG Line.
If we take an example car at roughly the middle of these price points; the Jaguar XF Sportbrake 2.0 Diesel R-Sport 163PS RWD Auto, with a P11D value of £40,420 and emissions of 139g/km CO2, RDE2 compliance delivers savings of £646.72 in the 2020/21 tax year for a higher rate taxpayer. See the calculation below:
£40,420 x 32% (BiK tax rate with RDE2 compliance) x 40% = £5,173.76
£40,420 x 36% (BiK tax rate without RDE2 compliance) x 40% = £5,820.48
Click here to see the full company car benefit in kind tax tables to 2023
Organisations will also benefit from not having to pay the higher first-year rate of VED that applies to new diesel cars that do not meet the RDE2 standard. For the vehicle above, this is the difference between £530 and £210.
While alternative fuel vehicles such as BEVs (Battery electric vehicles) and PHEVs (Plug-in hybrid electric vehicles) are rightly being heralded as the ultimate solution in reducing greenhouse gas emissions from cars, clean diesel engines have significant advantages over their petrol equivalents. For example, Jaguar Land Rover2 claim that their latest diesel engines have around 25% better fuel economy, produce around 15% less CO2 and have similar NOx emissions to their petrol engines.
SMMT forecasts3 a further decline of 8.2% in diesel car registrations in 2020 but the introduction of more RDE2 models is likely to slow the decline in the medium term, meaning better alternatives for drivers and more options for fleet managers developing choice lists. If you’d like to speak to someone about the best fuel options for your fleet click here to contact us.
1 SMMT VEHICLE DATA – Car Registrations December 2019 Overview
3 SMMT UK new car and LCV registrations outlook to 2021 – December 2019