Despite vehicle manufacturers' claims that it will be difficult for them to achieve 120g/km fleet average CO2 emissions by 2012, as the European Commission - and now also the European Parliament - propose, changes to national vehicle taxation schemes mean a market shift is already bringing that target within reach.

According Jato Dynamics, financial incentives are encouraging people to buy low CO2 cars. The Netherlands, Austria and Portugal offer lower purchase taxes for customers buying such models while, in Denmark, the UK and Sweden, annual circulation taxes are linked to CO2 emissions.

One of the biggest successes is France. Since the beginning of this year buyers of cars emitting more than 200g/km CO2 have had to pay a EUR1,600 purchase tax. Buyers of cars emitting more than 250g have had to pay an additional EUR1,000  while buyers of those emitting less than 131g do not have to pay any purchase tax at all. As a result, Jato Dynamics said, the share of cars sold emitting less than 130g/km has risen from 31% of all sales to 43% in the first half of this year.

Fleet average emissions in France are now down to 140.5g/km, well below the European average, which is closer to 160g/km. Only Portugal is lower at 138.9g/km.

In Germany, where there is no CO2-based tax, the proportion of cars sold that emit below 130g/km is just 11.3%. There has been a small increase compared to a year ago, 2.6 percentage points, but it still has the third highest average CO2 emissions of all 17 European states, after Switzerland and Sweden. The situation in Germany should change from 2010 when annual circulation taxes will be linked to CO2 emissions rather than engine size as they are at the moment, according to Jato.