The guide shows that the company car is already inextricably linked to carbon emissions-based taxes in 20 Member States across Europe, while other countries are keen to follow suit as governments continue to target the company car as a source of tax-raising revenue.

However, PwC has found that by lowering CO2-emissions by only 10grammes from 135g/km to 125g/km, fleet managers can already produce annual savings in fuel costs of around €44,000 on a fleet of 200 cars in most European countries.

These savings can rise dramatically once direct, indirect and hidden taxes are added. In Portugal, for example, once direct taxes are included, cost savings can be as high as €132,000 a year, while in Belgium, where there are more indirect and hidden taxes, the savings can be a staggering €163,000.

When focusing on potential tax savings, reducing CO2 emissions pays off most in major developed Western European countries such as Belgium, the UK, the Netherlands, France and Spain, all of which have company car taxes linked to CO2 emissions.

The guide also looks at the impact of governments’ moves to lower the CO2 thresholds for national car tax schemes and the growing numbers of countries offering incentives to select cars with low carbon-emitting electric hybrid engines.

Add in the rapidly increasing pump costs of diesel across Europe and the rising residual values of petrol cars due to a growing consumer market, and the report says that petrol, hybrid and electric cars will all have to be carefully considered as well as diesels in choosing the right mix of company cars to meet corporate needs as well as drivers’.