While Henry Ford once offered any colour, as long as it was black, the world is now moving towards another hue: green. Regulations tighten by the year and, with the EU's recent pledge to enforce tough average emissions standards, hugging trees, or being seen to, will soon be the only way to run a fleet at all. The cleanest cars on the list could become financial millstones long before they're due for replacement as the EU drives down emission. And even the tax-friendly diesel will be hit hard in 2009.

Changes in the business-in-kind tax allowances in 2001 led to employees deserting company car schemes in droves as their perk hit them in the pocket. Others see a company car as more than an extra; they are socio-economic symbols, barometers of success and status. Heinous taxation won't force managers into a tiny tin box, even if it single-handedly saves the world.

As things stand, those driving vehicles pumping out less than 100g/km of carbon dioxide (CO2) pay no Vehicle Excise Duty (VED), while high polluters that kick out more than 226g/km pay £215 (rising to £400 in 2008) per year. That's a sizeable potential saving for any size of fleet.
Emissions-led taxation has driven up sales of smaller cars and diesels, despite a surcharge on the sticker price and a three per cent higher tax rate on the latter. Due to greater fuel efficiency, it is diesels that are winning the day as their CO2 emissions are less than their petrol-powered equivalent and "oil burners", as they are perhaps unfairly known, account for half the vehicles in the EU right now.

Truly green cars come with too many strings attached; the limited range of electric cars and the lack of availability of renewable fuels on these shores are examples. Also, Biodiesel cars need more servicing, and poor grade fuel can actually inflict damage. This makes diesel the most practical choice.
But, buy the wrong diesel vehical today and it could turn into a disaster: tough Euro V emissions regulations that come into force in September 2009 could dramatically alter the taxation landscape. Nitrogen oxide (NOx) is the new public enemy, together with other particulate matter that has been linked to cancer. A car without a strong particulate filter will simply not match up to the regulations.

There are other factors to consider. Congestion charging is likely to creep into more cities across the nation: dual-fuel or fully green cars are exempt, saving £8 per day, per car. Meanwhile the proposed pay-per-mile scheme will almost certainly favour environmentally friendly cars. Both schemes will kick in before the end of the next vehicle's life cycle.

The obvious answer is to embrace the environmental lobby and jump into the Toyota Prius, the poster child of green motoring—kicking and screaming if necessary. But the Prius is not the only answer. Not only are the car's figures treated with moderate suspicion by the motoring media, which generally find the small engine burning more fuel than is promised, there are also a number of other potentially more attractive alternatives to keep the directors and the government happy.

Varying shades of green

Biodiesel
Audi A4 1.9Tdi
Theoretically any diesel car can run on biodiesel and the advent of high-quality rapeseed oil fuel means we now have a renewable energy source, should the oil wells run dry. The government is keen on biodiesel and has reduced fuel excise duty on it by 20p per litre. Some have tried to circumvent the tax altogether by using their own biodiesel—old cooking oil. With a new fuel filter, many cars will run trouble-free on it.

Audi only guarantees its cars if they're run on a five per cent mixture of biodiesel which doesn't offer a big advantage over traditional fuel. But as a renewable energy source, that's still in its infancy, it should become cleaner over time. Still, with returns of 49mpg and emissions of 156g/km, the Audi A4 TDi is among the cleanest executive cars available; even though, being a standard diesel, it is not congestion charge exempt.

Economy 49mpg (5.8litres/100km)
Emissions 156g/km
Pros One of the cleanest executive cars on the market
Cons No congestion charge waiver

Diesel
Mercedes C200 CDI
Mercedes has taken a holistic approach to the green cause with this model which holds a coveted environment certificate from the German third-party safety and standards organisation TUV. NOx emissions at 90 per cent beneath the current Euro 4 limit and 86 per cent fewer hydrocarbons have helped, but Mercedes has also examined energy requirements from cradle to grave.

The raw components take much less energy to make than in 2000, and the car meets standards set for 2015 that will ensure 95 per cent of the car can be eventually recycled. More than 30 components can be made from recycled plastics. The Mercedes returns 48mpg on a combined cycle—a match for most machines on the market. But there is no concession on congestion charging. Next year, Mercedes brings its Ecotec exhaust to the UK which is launching in the US now. The system breaks NOx down to harmless nitrogen and water.

Economy 48mpg (5.9litres/100km)
Emissions 156g/km
Pros Strong on recycling credentials
Cons A year to wait for the Ecotec exhaust that will break down NOx emissions

Bioethanol
Saab 9-5 BioPower
As with biodiesel, bioethanol is a renewable power source produced from sugar beet. Saab's 9-5 BioPower can run on E85 (an 85 per cent bioethanol fuel mix) or pure unleaded petrol and the 2.3 litre engine delivers 210 bhp on E85, which is 14 per cent more power than when run on petrol, while cutting CO2 emissions by up to 70 per cent claims Saab. The flexfuel technology detects which fuel is in the tank and adjusts accordingly.

Like biodiesel, bioethanol gets a tax rebate of 20p/litre and a £10 reduction in Vehicle Excise Duty, fixed until 2008. It also costs 2p/litre less at the pumps. The bad news is that, according to Swedish research, a driver covering 15,000km a year would use 1,350 litres of petrol, but 1,755 litres of E85, of which 263 litres is petrol anyway. Also, E85 is only available in limited Morrisons fuel stations at present.

Economy 30mpg (9.4litres/100km)
Emissions 218g/km
Pros Versatility in fuel usage
Cons Remains heavy on fuel consumption
(Figures above apply to 2.0 litre engine)

LPG
Vauxhall Vectra 1.8 Dualfuel LPG
Liquefied petroleum gas (LPG) has lost some of its early momentum. While it is up to 40 per cent cheaper to run a car on LPG than standard petrol—mainly because of the large pump price differential in the two fuels—a general lack of availability of LPG in the UK remains a problem.

Vauxhall is a leader in the market. Its cars with LPG tanks are converted by Millbrook and come with a three-year/100,000 mile warranty. Each conversion costs about £2,400 which would need to be taken into account in determining the overall value over a fleet's lifetime.

The facts that CO2  emissions are no better than those of modern diesels, and resale values of LPG cars are lower than their petrol-powered equivalent, also need to be take into consideration.

Economy n/a
Emissions 158g/km
Pros LPG is cheap to buy
Cons Only around 1,300 outlets stock the fuel

Compressed Natural Gas
Volvo V70 CNG
Volvo has switched its investment from LPG to methane as a fuel for the future. As a renewable energy source, CNG is a genuinely green alternative and, when the V70 Bi-Fuel car is running off the CNG tank, emissions drop 16 per cent when compared to the petrol counterpart. While the car will probably run on petrol for a large part of its life due to limited availability of CNG, this is a matter of supply and demand and could change.

With just 30mpg from the 2.4-litre engine, regardless of the fuel used, this isn't the most efficient car in the world. But Volvo has gone out on a limb with CNG so, like the car maker, this investment might need to be viewed as a long-term investment.

Economy 30mpg (9.4litres/100km)
Emissions 169g/km
Pros CNG is a genuinely renewable energy source
Cons Not particularly fuel-efficient

Hydrogen
BMW Hydrogen 7
This one won't be on the mass market until 2008, but it may be worth keeping the current board fleet until new emissions regulations hit home.
As with other hybrids, the hydrogen tank can be engaged at the flick of a switch. It has a range of 125 miles attached to a less environmentally aware six-litre V12 petrol engine. In either mode it produces 260bhp that will send the car to 62mph in 9.5 seconds and a top end speed of 143mph.

While BMW has bet everything on hydrogen, due to its infinite supply and zero emissions, it remains to be seen whether the demand for this thirsty technology will be there, or whether hydrogen power will be the next Sony Betamax. That aside, there are no extraneous Lithium batteries to dispose of, the hydrogen tank should last a lifetime and boot space is only slightly compromised to accommodate the gas.

As things stand, hydrogen is still produced with fossil fuels, as solar or wind-produced gas is four times as expensive to make. As a future
energy source it has potential but, for now, this is BMW's chance to look and feel like an environmental crusader.

Economy 6mpg (50litres/100km) using only Hydrogen
Emissions None
Pros A powerful beast
Cons An expensive way to get around town

Hybrid
Lexus LS600 Hybrid
Lexus has blazed a trail in the hybrid sector; first with the RX400h SUV and now, at the executive level, with the LS600. The luxury arm of Toyota, which bought us the popular Prius, has introduced a five-litre V8 combined with electric motors to produce an epic 430bhp, with a solid 200bhp coming from the electric motors; more than the Prius offers in total. So there will be no wheezing like an asthmatic on a steep hill in this machine.

The five-metre long car is loaded with luxury goodies and groundbreaking safety equipment but returns just 30mpg, which is no match for fuel-sipping diesels. And its emissions are a high 220g/km. So while the Lexus is the best in show of the big executive saloons, it's more of a statement than a real environmental undertaking. And the lithium batteries will need replacing every 10 years.

Economy 30mpg (9.4litres/100km)
Emissions 220g/km
Pros Gadget-filled luxury
Cons Emissions remain high

Battery Power
GM Volt
The Volt won't hit the market for a year and will wear a different badge when it arrives in the UK. But it's the first battery-powered car that a director would be seen dead in, and will pave the way for more seductive models. Released as a concept car at this year's Detroit Motor Show, it's a zero emissions car. The electricity, though, has to come from somewhere and that tends to be a smoky power station. But, as the grid gets greener, so will the car. It's going to offer a surreal driving experience as it makes no noise whatsoever. The battery packs will have to be replaced every 10 years and may be the defining factor in how long a car sees active service; replacements may cost more than the trade-in price.

Economy n/a
Emissions None
Pros Quiet as a mouse
Cons Costly periodic battery replacement

The Director's Pocket Book Company Fleet Management—an environmentally friendly approach is out now.

CSR is boosting company car usage

Martyn Moore, editor of Fleet News, explains why company cars are finding renewed favour

Driving on company business is probably the most dangerous thing employees do. Clocking up more than 25,000 business miles a year puts you third among accident-prone groups, just behind deep-sea trawler fishing and coal mining.

Employers have a duty of care towards their workers. Yet, while no one condones the use of machine tools without a guard, many are surprisingly casual about driving on company business.

The fact that one third of the 3,000 road deaths in Britain each year involves someone driving for work is not lost on the government. Legislators see business drivers as an easy target in their bid to reduce the carnage, because they can get at the driver through their employer. How would you feel if your sales manager knocked down a child while speeding to his next appointment, talking to head office on his phone?

This fear of an employee causing death by dangerous driving has led to a renaissance for the company car. For years, companies encouraged employees to opt out of company car schemes and take the cash, replacing the burden of administration and responsibility with a simple payment.

But if an employee has to drive to conduct business, employers can't just buy their way out of responsibility for the vehicle and the way it is driven. A company car ensures that business drivers are provided with a vehicle that is fit for purpose and well maintained. And it's much easier to keep tabs on drivers if licence checks, insurance cover and fair mileage reimbursement are handled through a company car policy.

Employers must also consider their firm's reputation, the image of brands and the corporate social responsibility (CSR) aspect. What does a battered old van weaving through traffic and belching smoke say about the company whose logo adorns its sides?

Pressure on manufacturers to reduce emissions and fuel consumption has created cleaner and more efficient cars. And environmental lobbying should lead to further improvements. But although small, diesel-engined and hybrid cars such as the Toyota Prius are finding favour with fleets, take up among executives has been slow.

It's hard to deny the seductive appeal of the shiny, new company car. You can see the glint in the eye of the newly promoted manager on being handed "the list", although this will increasingly take the form of a web page on the leasing company's website, together with helpful tax calculators and car comparators. One fleet manager at a leading pharmaceutical company reckons the Audi TT is still a deal-maker when it comes to recruiting highly motivated sales staff.

So, the perk car is far from dead and employee car ownership schemes (ECOs) are finding favour among companies that want to give employees flexibility and choice, without losing responsibility and control. 

Responsibility for running an organisation's fleet no longer means having a good relationship with the dealer service manager and checking a few tyres in the yard. Safety, efficiency and CSR are board agenda items and—whether executed by an in-house fleet manager with strategy, policy and procurement skills, or outsourced to the leasing company—they need attention at the top.

There's compelling evidence that the greener the fleet, the cheaper it is to run, especially with congestion charging on the rise, and road charging on the agenda.

For those of us who remain unconvinced by the Prius and other hybrids, salvation may be just around the corner. BMW, stalwart of the executive parking space since the sad decline of the Jaguar, has revealed its new hydrogen cell-powered vehicle. The only by-product is water and that engine will appear first in the top-of-the-range 7-series. Form an orderly queue in the car park.

Prius: tried and tested

Not every company is taking a wait-and-see approach to environmentally-friendly cars

Focus Information, a subsidiary of US firm CoStar, has wasted no time in ordering a fleet of 14 Toyota Prius T-Spirits.

Specialising in the production of reports on commercial buildings, Focus's cars are fitted with high-tech Global Positioning Satellite (GPS) equipment, 3G telecomms and docking stations for laptops. Staff drive round each building to map it without even leaving the vehicle.

This style of operation plays to the Prius's strengths; low speed driving in the city does not engage the 1.5-litre petrol engine and, instead, it works solely on the battery. But when the car is driven off to the next site, the petrol engine kicks in and recharges the battery.

"Ordinary battery cars would have been a waste of time as we need to power so much kit," said Focus Information director Matthew Hopkinson. "We reckon we'll average 50mpg, despite the amount of stop-start driving we do, which is way in excess of what any normal car could give us. So not only is the Prius kind to the environment, it's also cost-effective."

As the firm works around commercial buildings, there is a great deal of inner city driving. With its vehicles earmarked for five years of service and 125,000 miles, the congestion charge and the potential pay-per-mile scheme, the Prius was an obvious solution.

CoStar already runs 100 of the Toyotas in its US fleet and has not been stung with excessive costs come servicing time. And with the public all too aware of the Prius's environmental message and the fashionable status of the car thanks to the likes of Cameron Diaz and Leonardo di Caprio taking to the wheel, resale values are strong.