Research carried out by two UK consulting firms has concluded that cost savings resulting from the widespread adoption of more fuel efficient vehicles in Europe could boost the European economy and create around 400,000 new jobs.

Implementing the EU’s proposed 2020 auto-standard of 95 grams of CO2 per km (g/km) for automobiles and 147 g/km for vans - as a stand-alone measure - could result in 356,000 new jobs, says the report by Cambridge Econometrics and Ricardo-AEA.

But if the realised target were 90 g/km for cars and 141 g/km for vans with annual 3% (and not 1%) efficiency gains in the following years, the jobs created could top 443,000.

“Over-achieving on targets is a plausible scenario, because several automakers have already met their 2015 goals ahead of time,” the report says.

Around one-third of the forecast new jobs would be created in the auto-industry value chain, due to the labour intensity of the low-carbon car manufacturing process. The other two-thirds would result from a shift in spending away from fossil fuels to other areas. 

But the jobs gains would not accrue until 2030, due to the 10-year period it takes for an uptake of new cars to feed through to the economy.

The report also finds that efficiency improvements would add an extra EUR1,000-EUR1,100 to the cost of an average car in 2020, but that this would be offset for consumers by fuel savings in the long run.

The report also concludes that the reduction in spending on imported oil means that Europe's net trade position also improves. 

Proposals for tighter emission standards in Europe have split the industry.

Link to the full study on Cambridge Econometrics website