New fuel rules will drive up car prices and motor tax costs

Changes to the way a car’s official fuel consumption and emissions are tested is changing this year, and could bring chaos to the Irish car market. Nothing has yet been done to update the motor tax and vehicle registration tax (VRT) systems.

The changes will begin from September, as the industry switches from the current New European Driving Cycle (NEDC) test to the actuallynew World Light Duty Test Programme (WLTP).

The NEDC test has been the bedrock of official fuel consumption and emissions testing since it was first introduced in 1970, but is at this stage utterly discredited. Not only is it the test which (along with the American EPA tests) Volkswagen was so effortlessly able to swerve around with its diesel defeat devices, it has also long become a total fiction when it comes to the recorded fuel consumption of vehicles.

A decade ago the gap between the laboratory-based NEDC test and real-world driving was around 10 per cent. Now it’s more like 45 per cent, and even higher for some specific vehicles.

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Originally developed by the UN, the WLTP runs a car for 23km, as compared to the old test’s 11km. Gear changes are more random, the average speed is higher, and crucially optional equipment and its effect on both consumption and emissions is taken into account.

It’s this last point which is worrying the Irish car trade, both that the current tax system can’t cope with such a massive influx of new data, and that the entire car market is going to be put into a tailspin of confusion thanks to wildly differing CO2 emissions as new vehicles come on sale under the new regime, and older cars are retested.

Model range

"Essentially, now the certificate of conformity (COC) form, which used to cover an entire model range, will now be individualised to your car," one motor industry insider, speaking off the record, told The Irish Times.

“The problem is that nothing is being done to change the existing tax and VRT system to account for the changes in measurement. Depending on the vehicle you’re looking at, you could jump up a tax band very easily, as the WLTP test is likely to see official CO2 emissions rise by around 8-10 per cent.”

As there is a year’s lead-in to the full implementation of the new system, it also means some cars are going to be more competitive than others at certain times between September 2017 and September 2018.

From June this year all new models coming onto the market for the first time will have to be tested on the new WLTP system. Older models, at the discretion of their makers, will have until September 2018 to be tested. Which means there will be a great deal of strategic use of that leeway to allow cars whose CO2 levels will increase to remain competitive.

For the average car-buyer it’s going to get confusing, and potentially very expensive. Adding on extras, especially those that affect the mechanical performance of the car such as optional wheels and tyres, or simply those that add weight, will make a noticeable difference.

Major change

It all has the unpleasant ring of the last major change in the car tax system in 2008, when we switched to the current CO2-based setup.

A spokesperson for the Department of Local Government did say that “the matter is under consideration in the department as regards motor tax. The industry will be notified well in advance of any proposed changes to motor tax.”

The issue goes beyond merely advising the car industry of what is going to be done, however. There is a further hurdle for the Government to surmount in this case: the EU has said the new system must not add to the costs for the consumer. Given that the EU already takes a pretty dim view of Ireland’s VRT regime, the apparent lack of preparedness could put the Government on thin ice.

Without changes to the taxation system, the cost of buying and taxing a new car is going to begin rising after September, and that appears to be the only thing that is certain right now.

NEDC to WLTP...... What changes?

NEDC Test ..........WLTP Test

Single test for all cars ......Three different tests for different types of vehicle

20-min test ....... 30-min test

11km distance covered..........23.25km covered

Two-part test........... Four-part test, with higher speeds.

37 per cent urban........13 per cent urban

63 per cent extra-urban........87 per cent extra-urban

34kmh average speed.......46.5kmh average speed

120kmh max speed.....131kmh max speed

Optional extras not....... Optional extras taken into

considered account

Fixed gear shift points.........Variable gear shift points for each vehicle

20-30-deg Celsius temp.......Fixed 23-deg Celsius temp