The document discusses how establishing a "magic metric" of grams of carbon dioxide per kilometer (gCO2/km) to measure vehicle tailpipe emissions has transformed the European automotive industry. The EU introduced regulations in 1999 requiring labels displaying gCO2/km and in 2009 set fleet-wide targets of 130gCO2/km by 2015 and 95gCO2/km by 2020. This has spurred major innovation, with average EU emissions declining 5% in 2009 and 4% in 2010. Individual manufacturers like BMW, PSA, and Renault have cut emissions substantially to meet regulations. The magic metric has also enabled regulations at national, city, and organizational levels to incentivize lower-emission vehicles.

1. Cut The Fluff Series 1
Transparency
in action: The
power of the
magic metric
By Ramon Arratia
November 2011
www.interfaceflorcutthefluff.com
www.interfaceflor.eu/gobeyond

2. Transparency in action: The power of the magic metric
Transparency in action:
The power of the magic metric
It’s not often that the motor industry can be be the embodied energy of all the materials,
vaunted as a sustainability success story. Yet, the production, consumer use and end of life.
involuntarily – thanks to European Union (EU) It’s the same for a building; you need to take
regulatory leadership – it is becoming a great case into account embodied impacts as well as the
study of how other sectors can make progress use, refurbishment and demolition phases. But
towards their environmental objectives. This is concentrating on the highest impact in the life
all down to the use of a ‘magic metric’ – a single cycle is a very good start.
piece of data that has the power to galvanise
For a car, this is the consumer-use phase.
legislation at all levels to create a level playing
Building a car uses up lots of energy, as well as
field that promotes strong competition and
raw materials and toxic chemicals. But by far the
innovation to redesign products to reduce their
greatest proportion of a car’s total environmental
environmental footprint.
footprint comes after it has left the
factory – when it is being driven.
A magic metric has the power to According to the European Environment
galvanise legislation at all levels Agency, around 77 per cent of the
environmental impact of a car comes in
to create a level playing field. this ‘use’ phase.
What has happened to the European car Environmental impacts during
industry today is a fine example of the depth of the lifecycle of a car1
transformation that focusing on a magic metric
like this can bring about. In this case, that magic
metric is grams of carbon dioxide per kilometre 1% 8%
(gCO2 /km) – a measure of the greenhouse gas 1%
emissions generated when a car is driven (often
referred to as tailpipe emissions). 13%
What began with regulations mandating labelling,
and later, reductions in gCO2 /km, has gone well
beyond compliance, changing behaviour across
the board. There is now fierce competition
between manufacturers over which car has the
least environmental impact. This has stimulated
extensive innovation in the car industry and its
supply chain; enabled more transparent and
comparable consumer communications about the
environmental impacts of vehicles; and, in turn, 77%
encouraged consumers to take a much greater
interest in the ‘green’ credentials of a car they n Production n Tank to wheel
might buy. n Parts n End of life
n Well to tank
Choosing the right metric
As an advocate of full life cycle thinking, I would 1
European Environmental Agency:
of course support metrics that take into account http://www.eea.europa.eu/data-and-maps/
the full life cycle of a product. For a car this would figures/life-cycle-analysis-of-passenger-cars
The Cut The Fluff Series 1 Ramon Arratia November 2011 02

3. Transparency in action: The power of the magic metric
While car manufacturers used to report progress This is sustainability commoditized - as it should
on reducing impacts from their manufacturing be. Even the green claims that are still used in
operations, they rarely saw themselves as being the market - such as Renault’s ‘eco2’ label and
accountable for the full environmental impact of Peugeot’s ‘Blue Lion’ eco standard - are based on
their product. Indeed, for a long time the European the magic metric.
car industry had no incentive to
design vehicles that would use less
fuel and thereby emit less CO2 into
Today even my mother knows that
the atmosphere. Why would they if 160gCO2 /km is too much and that
they were not paying the bill, and as
long as most customers continued
100gCO2 /km is pretty good.
to choose cars based on how cool
The beauty of such a metric is that it goes beyond
they look or how cool they make them look? In the
point of sale to all promotional materials. Thanks
voluntary, ‘let the market solve the problem’ era,
to the labelling directive, today all car advertising
CO2 emissions from road transport in Europe rose
must include the gCO2 /km metric. This has created
by 29 per cent between 1990 and 2007. The EU
consistency and transparency while enabling the
had to take action because cars are responsible
consumer to get used to the metric and base their
for around 12 per cent of total EU carbon dioxide
emissions. buying decisions on it. Today even my mother
knows that 160gCO2 /km is too much and that
It was a two-pronged approach from the EU that 100gCO2 /km is pretty good. This consumer literacy
helped to transform the attitudes of the industry and awareness has helped shift the focus of the
and consumers – thanks to the magic gCO2 /km car industry to the ‘in use’ stage of the product.
metric.
The Car Labelling Directive, then, has laid the
First, the EU introduced the Car Labelling Directive foundation for a change in consumer habits. But
in 1999. This mandated that a label on fuel as the 1990-2007 figures for CO2 emissions from
economy and gCO2 /km must be attached to a car road transport have shown, it has not in itself
or displayed clearly near each new model at the ushered in a big reduction in tailpipe emissions.
point of sale.
What has made the real difference, in conjunction
with the Car Labelling Directive, has been
Cut the fluff and just tell me the more daring and successful second
prong of the EU approach. Top-down this
the gCO2/km for this car. time - focusing on the manufacturers,
not the consumers. In 2009 an EU-wide
This bottom-up approach aimed to create new regulation came into force that required each
competition in the car industry around tailpipe car manufacturer to decrease average tailpipe
emissions by enabling consumers to make an emissions across its portfolio to 130gCO2 /km by
informed decision about the environmental impact 2015 and 95gCO2 /km by 2020.
of the product they were planning to buy. Most
people may still choose a car based on cost, These targets are not just wishful thinking: there
design or brand, but at least they are now able to are financial implications if you don’t comply.
understand the environmental implications of their From 2010, if the average CO2 emissions of a
decisions. manufacturer’s fleet exceed its limit in any one
year, the company has to pay an excess emissions
Most importantly, the labelling directive eliminated premium for each car registered. This premium
many opportunities for greenwash. Few amounts to €5 for the first g/km it exceeds the
manufacturers these days spend time trying to target, €15 for the second g/km, €25 for the third
market the little ‘green’ things they are doing in g/km, and €95 for each subsequent g/km. From
their factories or with their recyclable seats. The 2019, the exceeding the limit will become even
magic metric is allowing customers to say: ‘cut more expensive, with the cost of even the first
the fluff and just tell me the gCO2 /km for this car’. g/km rising to €95.
The Cut The Fluff Series 1 Ramon Arratia November 2011 03

4. Transparency in action: The power of the magic metric
With such significant financial implications, emissions from newly sold cars to 140g/km
perhaps unsurprisingly, the impact of this by 2008. That would have been a 25 per cent
approach has been almost immediate. In 2009 reduction. But with no stick or carrot available
the decrease in average EU emissions was five per to galvanise manufacturers into action, they
cent against the previous year, with a further four predictably fell well short of that commitment,
per cent cut in 2010. achieving just a 2.2 per cent reduction between
1998 and 2006.
In 2008 the average gCO2 /km for car emissions in
the UK alone was 158, but by the end of 2009 this So the EU set up a mandatory target with a
was down to 149.5. Within just one year of the timetable long enough to allow companies
regulation coming into force, the UK car industry to invest, innovate and make the necessary
had achieved a reduction in tailpipe emissions of widespread changes required to meet it. It also
Average CO2 emissions of new passenger cars in Europe (g/km)
CO2 monitoring Formal adoption of CO2
200 system established performance standards regulation
Automative industry self
commitment adopted Economic crisis
Review of European
180
185 183 Commission strategy decision to
181 introduce regulatory measures
178
174
172 170
160
167 166 163
162 161
159
154
140
146
142
2015 target
120 5%
Annual change in CO2 emissions (in percent)
100
2020
target
0%
80
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
more than five per cent, compared to just 2.2 per wielded a few sticks in the form of financial
cent in the eight years up to 2006. penalties. Having coupled these sticks with very
visible metrics, the target quickly began to deliver
That the EU felt the need for regulation was largely results. Carbon dioxide emissions from new cars
because it had run out of patience with the lack of have begun to decrease substantially.
progress from voluntary industry agreements. In
1998, the European Automobile Manufacturers’ There seems little doubt that manufacturers will
Association had agreed to reduce average tailpipe now meet the EU wide target of 95gCO2 /km by
The Cut The Fluff Series 1 Ramon Arratia November 2011 04

5. Transparency in action: The power of the magic metric
2020. That’s the beauty of the market: tell it what the cars have been made to emit less CO2 . But
you want to achieve and it will usually find a way they also do it because they save money, or get
to do it. But without a clear focus, progress will be free parking, or some other advantage. This puts
limited. This is where the magic metric comes in. into practice the idea that people should pay less
for more environmentally friendly products. And it’s
The enabling power at local level all thanks to the magic metric.
The power of having a magic metric is that it
enables smart regulation beyond Brussels. Three key elements must be in place to effect
Here are some examples of how it has enabled change in this way: a clearly measurable metric
regulatory mechanisms at national, city and that relates to the main life cycle impact of a
organization levels: product; a transparent way of communicating this
metric to consumers, and a regulatory framework
• Car purchase tax: In France the Bonus/Malus
(at EU, national or local level) that pushes
scheme makes sure customers choosing to
consumers to make the right choice. The results
buy a heavily polluting car pay extra tax on the
from this regulatory approach to the car industry
price of that car, while those who buy a more
are beginning to speak for themselves.
fuel-efficient car will receive a reduction in the
price. The tax penalty ranges from €200–2,600
per car, and the incentive reductions range from The magic metric in action
€200–5,000+. BMW: In the 15 years to 2010, BMW achieved a
30 per cent reduction in CO2 emissions from new
• Company car tax: In the UK tax is higher, on vehicles in Europe – the biggest reduction came
a sliding scale, for company cars that produce after 2006. Today, the average emissions level
higher emissions. A petrol car that generates for its vehicles in Europe is 148g/km and BMW
less than 75gCO2 /km attracts a tax rate of five
has set a target to reduce CO2 emissions from its
per cent; one that produces 235g will be taxed
global fleet of new vehicles by at least 25 per cent
at 35 per cent. Average CO2 emissions from
by 2020 (compared with 2008).
company cars were around 15g/km lower in
2004 than would have been the case if the PSA: The maker of Peugeot and Citroen has cut
regulation had not come into force. its average corporate CO2 emissions in Europe to
131.8 g/km in 2010, from 135.8 g/km in 2009
• Congestion and parking charges: In London,
and 140.1 g/km in 2008. PSA has a target to
cars that emit 100gCO2 /km or less and meet
sell one million vehicles emitting less than 120 g/
the Euro 5 standard for air quality are exempted
from the city’s congestion charge. In many towns km of CO2 in Europe each year from 2012. It also
in the UK, such as York, Salford, and Milton aims to halve tailpipe emissions from the vehicles
Keynes, one can qualify for discounted parking if it sells in China by 2020.
you have a low carbon vehicle. Renault: With a target to reduce average tailpipe
• Procurement policies: Essex County Council emissions to less than 100g/km by 2016, Renault
in the UK has a fleet of 850 vehicles, 74 per is already on its way to achieving 120g/km by
cent of them cars. It has set an emissions cap 2013 – that’s a 17% reduction from 146g/km
of 160g CO2 /km for any new delivery and the in 2007.
average today is 135g CO2 /km. Arval, part of the
The graphs on the next page shows the
BNP Paribas Group, has an average fleet CO2
performance of BMW and Renault. That car
of 128g/km after it refreshed its company car
manufacturers use the regulatory target in their
choice list to include more of the lowest emitting
graphs as a benchmark shows how critical EU
vehicles on the market.
action on the magic metric has been. The lack
With all these regulations and tax advantages, it’s of progress before the regulations also suggests
no surprise that consumers are choosing cars with how ineffective voluntary corporate responsibility
less CO2 . They do it without knowing it, because has been.
The Cut The Fluff Series 1 Ramon Arratia November 2011 05

6. Transparency in action: The power of the magic metric
Development of CO2 emissions of BMW Group vehicles in Europe
(Index: 1995 = 100; Basis: fleet consumption of newly registered vehicles in Europe (EU-15) measured on the basis of
the New European Driving Cycle in accordance with the ACEA self-commitment)
105
100
100 101 102.4 101 98.6
95 96.7 96.7
94.8 88.6
90 92.9 92.9
90
85
80
80 73.3
75 71.4 70
70
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009* 2010
*measured only on EU-27 basis with effect from 2009
Renault average vehicle emissions performance and targets
150
140 146
CO2 regulatory level
130 137
120
110 120
100
90 < 100g in 2016
< 95g in 2020
80
2007 2010 2013 2016 2019
Beyond the magic metric
But the car industry could – and should – go registered as producing 0gCO2 /km; we need to
further. Despite offering a valuable tool for change take into account the environmental impacts
and focusing on the biggest environmental impact, associated with the carbon generated to produce
the magic metric in this case does not take into the electricity on which they run. This differs
account all the impacts throughout the product from country to country according to the carbon
lifecycle. For full product transparency, this is intensity of the national grid, so the real gCO2 /km
essential. of full use phase for electric cars will vary quite
substantially. Discussions are underway to find a
The gCO2 /km metric only deals with tail-pipe unified European metric on this.
emissions from a car. It doesn’t take into account
the emissions connected with producing the fuel Despite these flaws, the magic gCO2 /km metric
for the car in the first place, which according to we have been examining is very much focused on
The Society of Motor Manufacturers and Traders the right issue and has achieved demonstrable
accounts for 15 per cent of car-related emissions. improvements in the car industry.
Full product transparency is even more important Various refinements could strengthen the effect
given the increase in the number of electric of the magic metric, but the example of the car
vehicles. We can’t just have electric cars being industry is demonstrating the magic metric’s
The Cut The Fluff Series 1 Ramon Arratia November 2011 06

7. Transparency in action: The power of the magic metric
transformative power. So why hasn’t this approach better understand how common metrics mobilize
been adopted for other industries too? The answer regulators, consumers, civil society and innovators
is that it will be. It’s already in the pipeline in some – or it will lose out. Even worse, it may go out of
way or another for buildings, energy-using products business altogether. Just ask yourself if any car
and power suppliers. So be prepared. manufacturer would have had the vision 10 years
ago to really go for an 80gCO2 /km car without
If your business wants to achieve a competitive regulation, and a magic metric, to guide them.
advantage based on sustainability, then it had
Seven lessons for regulators from Europe’s magic metric for cars
1. Develop a common metric based on the full life cycle impact of a product – or at least
on its biggest impact
2. Adopt a top-down visionary approach at European level for the performance required in
a few years time (or federal level if in the US)
3. Regulate to ensure the metric is displayed
on all promotional materials
4. Make sure the metric is visible to consumers at point of sale
5. Use national taxes and regulations to reinforce changes brought about by the metric
6. Enable local and city legislation and taxes to reward products with the lowest footprint
7. Encourage companies and public purchasers to make decisions that promote products
with smaller footprints.
How the magic metric could work for the building industry
1. There will be a focus on either total life cycle carbon or the use of two separate metrics:
kgCO2 embodied carbon (for new buildings and refurbishments) and kgCO2 /m2 plus
kgCO2 per occupant per year for new and existing buildings.
2. There will be top-down EU performance standards for new buildings (very high) and existing
buildings (reasonable)
3. All member states, regions and cities will be encouraged to report (and compete on)
their averages each year (name and shame)
4. The use of EN 15804 Environmental Product Declarations across Europe will be made
mandatory, with all building materials companies having to publish their product data
through EPDs but also to make these available in promotional material so that architects
and designers can make informed decisions
5. At national level, high carbon buildings will be taxed and low carbon buildings will attract
fiscal advantages such as lower stamp duty on low carbon houses
6. At the local level, council taxes will be linked to absolute CO2 metrics
7. Display of the metrics in public and private buildings will be mandatory.
The Cut The Fluff Series 1 Ramon Arratia November 2011 07

8. Transparency in action: The power of the magic metric
About InterfaceFLOR
InterfaceFLOR is the modular flooring division of US-based Interface Inc. The company is a
worldwide leader in the design and production of high-quality, stylish, innovative modular floor
coverings.
Interface was one of the first companies to publicly commit to sustainability, when it made a
‘Mission Zero’ pledge in the mid-nineties to eliminate its impact on the environment by 2020.
Mission Zero influences every business, manufacturing and design decision made and inspires the
company to continually go beyond current business models, practices and solutions in order to
achieve its goal.
Interface is now more than half way to reaching its Mission Zero goal and has been widely
recognised for its achievements to date.
About the author
Ramon Arratia is the Sustainability Director InterfaceFLOR EMEAI. His focus is on continuing to
develop the company’s sustainability strategy towards Mission Zero as well as reviewing products,
services and business processes to ensure that they are as sustainable as possible.
Ramon plays a leading role in InterfaceFLOR’s ‘Let’s be clear’ campaign, an anti-greenwash drive
calling for full transparency in how companies declare the environmental impact of their products.
He has also been instrumental in InterfaceFLOR commitment to have all products covered by
Environment Product Declarations (EPDs) by 2012. Ramon is also leading InterfaceFLOR’s ‘war on
waste’ campaign, an initiative which calls for action to change European Waste Legislation within
the flooring and construction industry.
The Cut The Fluff Series 1 Ramon Arratia November 2011 08