A new report by the environmental pressure group Transport and Environment (T&E) has found that the average car sold in Europe last year was 4% more fuel efficient, emitted 4% less CO2, and yet was 2.5% cheaper in real terms than the year before.
The T&E report examined two cost estimates carried out for the European Commission, in 2001 by AEA Technology, and in 2006 by a consortium led by TNO, two research and consultancy companies.
Both were based on data supplied by the car industry.
The earlier report predicted that reaching 140 g CO2/km would cause the retail price of the average new car to increase by €2,400; the later study said €1200.
But despite increased fuel efficiencies, as a result of EU regulations, the report found that year-on-year prices had consistently fallen.
Jos Dings, T&E's director, issued a statement saying the EU should take "misleading" auto industry cost estimates with "an SUV-sized pinch of salt" in the future.
"The car industry has consistently resisted fuel efficiency regulations by complaining that cars would become 'unaffordable'," he said. "But car emissions have now dropped to 140 g CO2/km and that simply hasn't happened, prices have actually fallen in real terms."
Adding €3,000 to the price of a car?
The European Automobile Manufacturers Association (ACEA), which represents car-makers such as BMW, Daimler, Fiat, Ford and General Motors, has previously argued that a lower EU target of 130 g CO2/km by 2012 would "lead to a price increase per car of up to €3,000 on average".
This in turn would lead to European job losses, and the relocation of car plants outside the EU, they argued.
Contacted by EurActiv, an ACEA spokesperson provided a written response hailing the "great progress" made by the auto industry in reducing CO2 emissions.
The industry believes that a range of factors should be considered by legislators drafting CO2 legislation, including "manufacturing lead-time, affordability, support for breakthrough technologies, relevant infrastructure changes, the use of alternative fuels, and the need for market incentives," Sigrid de Vries said.
Car manufacturers' absorption of fuel efficiency costs had similarly been influenced by the economic environment, market demand, business models, the location of manufacturing and the pace of R&D expenditure, ACEA argues.
"This will not be any different in the future," de Vries added.
In 2009, the EU set its first legally-binding fuel efficiency standards for automobile CO2 emissions, and from the beginning of 2012, emissions from new cars should not exceed 130 g CO2/km.
Implementation of a 2015 standard of 120 g CO2/km is also beginning. For 2020, Brussels has a fixed objective of 95g CO2/km, which should be confirmed in 2013. This would be close to the most ambitious US scenario for 2025.
Passenger cars today account for as much as 10% of global CO2 emissions.