Etienne de Calataÿ: ‘Company cars are bad for the environment’
Recently, a study of HR service provider Acerta concluded that banning company cars would be bad for the environment. Chief Economist Etienne de Callataÿ (Orcadia Asset Management) contradicts this and gives four significant arguments.
The Acerta study has found that the average CO2 emission level of company cars has decreased by 17% between 2012 and 2019 (from 143 to 118 g/km). That is less than the average of privately owned vehicles. According to Febiac, this was 112 g/km in 2017 for company cars, against 119 for privately owned vehicles.
According to Etienne de Callataÿ, the fact that someone has a company car changes his behavior. As the vehicle costs him less, he will use it more often. And a car emitting less but driving (much) more will, in the end, emit more.
Secondly, what happens to the old car? Usually, someone receiving a company car already has a car. That car will be sold and be used somewhere else. The system of company cars, therefore, increases the number of vehicles worldwide.
Thirdly, when we talk about the environment, the whole life cycle has to be taken into account — also the production and the recycling. An average consumer would keep his car for approximately ten years. In the same lapse of time, he would have more than two company cars. Life cycle-wise those emit far more CO2 than a single one, despite their lower fuel consumption.
Fourthly, the time and kind of use have to be taken into account too. A company car is, logically, more prone to be driven in heavy traffic or traffic jams. That means the real emissions increase, but it doesn’t appear in the official emission figures.
Abolish the system
The conclusion of de Galattaÿ is clear: abolish the system of the company car. Don’t try to cure it with new complicated systems like ‘cash for car’ or a ‘mobility budget’.
“A wage has to be paid fully, and we have to compensate that with slower progressivity in the taxation of wages. The money saved abolishing the system can be invested in better public transport.”
De Galattaÿ concludes with one last remark: “No other country we like to compare with has such a high density of company cars as Belgium. Are we the only one to have found the recipe to reconcile the environment and economy? Or are we mistaken?”