With the 2008 re-launch of www.trendtracker.co.uk to fully automate our online reporting shopping facility, Trend Tracker has also launched into the blogosphere, with a mission to alert our customers and associates of any new facts, figures or issues we believe can usefully inform readers' thinking and business planning. To live up to this mission, we will contribute new content to these pages whenever we have good reason to, rather than daily or weekly.

For the automotive industry, the world has changed in many ways since Trend Tracker last published a conventional newsletter. We've covered the startling rise of private equity in one of our white papers, but this first Trend Tracker blog provides a first opportunity to comment on what has surely become the biggest issue for anyone involved in making, selling or fixing cars: the cost of complying with greenhouse gas emissions limits while facing up to the likelihood that oil will never again be as cheap or plentiful as it has been.

It's not a done deal, but it seems more than likely that in four years' time, 130 g/km of tailpipe CO2 will be as much as any manufacturer's fleet will be permitted to emit without being fined in Europe. And on the basis that both the manufacturers' lobby and the anti-car green lobby have greeted the EC's proposals with a degree of simulated outrage, this policy is probably as good a political compromise as it could be. True, the fines envisaged by Brussels are apparently much more expensive per tonne of carbon than the 'market' value enshrined in the EU's Emissions Trading Scheme. But, at least in the early years of the regime, the fines for non-compliance with the EU limit - assuming they are passed on to buyers of high-emissions cars - are unlikely to be big enough to change the complexion of the car market overnight. Nor will the £5 gallon, or the UK's new showroom tax plans for high-emissions vehicles.

A deficit of 10 mpg alone costs the driver of a big petrol-fuelled car around £1,000 a year compared to the driver of a comparable diesel car - so another £500 in purchase tax on a large BMW or Mercedes using a present-generation powertrain, or another £2,000 to pay for a comparable hybrid, won't be enough to drive many large cars off the roads.

Since 2007 was the first year that the majority of the globe's population living in cities, it may be that urban congestion and scarce parking spaces will have a greater effect on consumers than the cost of their cars, or the mild incentives available to buy more abstemious models.

With its legislation on car CO2 the European Commission seems to have been as clever in balancing conflicting interests as it was in drafting its 2002 block exemption regulation. The result is horribly complex, and will still leave governments open to the temptation to levy taxes on bogus 'green' premises. One of the most egregious is the UK's tenacious grip on a duty premium on diesel fuel, which serves as a disincentive to make the most rational, environmentally-sensitive choice of powertrain currently available to most car buyers. Even more absurd than the premiums some manufacturers still exact for the diesel versions of their cars.

Toby Procter