Assessing your environmental impact
The amount of carbon dioxide emitted from car journeys is directly proportional to the amount of fuel used.  The most direct method of calculating CO2 emissions is to multiply petrol used (litres) by 2.30 to give the amount of CO2 in kg (for diesel multiply litres used by 2.63).

If the amount of fuel used in litres is not known then an estimate can be made using the amount spent on fuel divided by the price per litre. 

Alternatively miles driven (converted to km by multiplying by 1.61) can be converted to CO2 kg using the CO2 g/km for your car (usually found on the car registration document).  This is the least accurate method as it does not take account of the type of journey, style of driving and inefficiencies in individual engines.

Your record of car emissions should include all business journeys that are paid for by the business.  This may be direct payment of fuel or through mileage expense records.

Journeys to and from work should also be included for all employees, directors and owners of the business.  This gives the highest possible figure, which is then your start point for targets and reductions.  Remember, most businesses do not publish the actual figures so there is no benefit in avoiding counting journeys for any reason.

Deciding on your targets
A sole director or sole trader working in central London may be able to aim for zero car emissions.  A rural veterinary surgeon may have no choice but to travel by cross country vehicle (4x4) to every appointment they attend.  Most contractors and businesses will fall somewhere between.  As with all of the environmental impacts there is no fixed standard and very little information currently available relating to benchmarking. 

The target you set for car emissions will depend on what efforts have already been made.  We recommend that targets are set in terms of grams of carbon dioxide per £1,000 of turnover.

As with any budget it can be helpful to establish the target as the best estimate of what will actually happen.  You may want to break the target down between journey types, individuals or work types.

Reducing your impacts
Where possible simply don’t use a car.  Ways to avoid car travel include home working, telephone calls instead of meetings, video conferencing, public transport, walking and cycling.  Where use of alternatives is not possible, lift share schemes should be considered and there are taxation incentives to create such schemes.

Route planning software should be used to ensure that multi stop journeys can be planned efficiently.  Rush hours should be avoided when possible as traffic jams significantly increase average emission rates.

Smaller cars
You should know your car's emissions per mile or km either by recording fuel use or looking up the official figure.  If your car’s emissions are more than 150g/km and your work does not take you off road then consider changing to a more efficient car.  If possible purchase second hand as this avoids further supporting the manufacture of new vehicles and scrapping of serviceable ones. 

Electric cars charged with electricity from 100% renewable sources are the least polluting car option.  However the range of cars in this category is very limited.  A more realistic option for most business use is a car with CO2 emissions of 120g/km or less.  These include some models from the following ranges:  Ford Fusion, Toyota Prius, Renault Megane, Citroen C4, Honda Civic, Mini Cooper and many more.  Remember that hybrid cars use a combination of petrol and electricity, some use a lot of petrol, others little.  It is irrelevant whether a car is hybrid or not, what is important is the actual amount of emissions.

Cars with emissions of 120g/km or less have many benefits:

• 120g/km is currently the realistic benchmark level; these are the least polluting cars and have lower running costs.
• From 2008/9 such cars will be "qualifying low emissions cars" on which lower benefit in kind tax is chargeable (petrol 10%, diesel 10% to 13%).
• Businesses can claim 100% first year allowances on such cars purchased between 17 April 2002 and 31 March 2008 and there is no £3000 restriction on capital allowance claims.
• Congestion charges will be reduced or removed for cars meeting the benchmark.
• Road Fund Licence (tax disk) is only £35 per year for cars with less than 120g/km emissions.  The next cheapest is £115 per year.

Mileage expense claims
Businesses can pay employees up to 40p per mile tax free for travelling by car.  This can create an incentive for employees to travel by car rather than using public transport as the 40p per mile is likely to exceed the marginal cost of using the car. One way to avoid this car incentive is to only pay expenses at 15p to 20p per mile for car use. 

Some companies have resolved this by having a policy of only paying car mileage when no other form of transport was reasonably available.  Others will pay a fixed amount of expense per journey regardless of the transport used, although care is needed regarding taxation of expenses in this area.

Tax free mileage rates of 20p per mile for bicycle journeys and 5p per mile for each passenger can be paid.  Tax relief is also available against the cost of purchasing a bicycle.

Bio fuels
Most diesel engines will run on bio diesel with little or no modification.  There are various methods of production of biofuel and various sources of the raw vegetable oils.  Some sources are environmentally damaging and have been linked to monoculture farming and deforestation.  Use of biofuel produced by palm oil is particularly destructive.  At the time of writing some respected sources say that it is preferable to use biofuel compared to fossil fuel, whereas others say it is not.  Any comments on this issue would be particularly welcomed.

There are limited supplies of biofuel produced from waste cooking oils.  Use of these fuels is considered environmentally friendly. It should be borne in mind that the limited supplies mean that they should not be wasted.  Although processing costs are currently higher due to low volume of demand for bio fuels, there are much lower duties on bio fuels which mean that prices are competitive.

Links to external pages (open in a new tab or window)

What Car green guide

Charity attacks rush for biofuels (BBC article)

Monbiot's car (Times Online article)

National Express quits biofuel experiment (Guardian article)