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New European carbon dioxide (CO2) standards for new vehicles which come into effect in 2012 will not only lead to European savings on oil, but also reduce global oil prices.
That is the verdict of a new study by the French institute Enerdata, commissioned by the European Federation for Transport & Environment, which concludes that there will be a 0.9 per cent reduction in global oil consumption resulting in a 1.2 per cent drop in oil prices.
According to the Federation, the model developed and run by this Enerdata is the only public model available capable of calculating oil prices as an output of supply and demand. By working out that the price of oil will fall when the regulations take full effect, the study suggests the benefits of fuel efficiency have been underestimated.
Jos Dings, director of the European Federation for Transport & Environment, believes there are both good messages and dangerous messages from this conclusion. The good news is that the benefits of reducing energy use are greater than originally thought. However, he states the dangerous part is that with the price of oil likely to drop demand will increase.
As a consequence he suggests that governments will have to take measures to dampen the demand for transport or their greenhouse gas reduction targets could go up in smoke. This could come through increased fuel taxes as long as the benefits of better technology arent wiped out by increased demand for lower priced fuel.
The CO2 requirements made mandatory in Europe begin phased implementation in 2012. They will reach a limit of 130g/km of CO2 by 2015.
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