The motor industry has welcomed a labelling system which will clearly indicate a vehicle’s efficiency to consumers.

Dealers will begin displaying ‘Green Labels’ in all new vehicles from July ready for the September 1 new-plate registrations.

The move follows a successful trial started in 2002. Labels show the vehicle’s estimated fuel cost over 12,000 miles, plus the cost of 12 months’ Vehicle Excise Duty, based on its CO2 emissions.

The design and colour-coding mirrors those EU-mandated on white goods such as refrigerators.

CO2 labelling has been a statutory requirement since 2001, but many in the industry feel the existing scheme has not been successful. “The emissions figures on the existing label are not put into context and it doesn’t get the message across that fuel economy is good for the pocket as well as the environment,” says Matthew Carrington, chief executive of the Retail Motor Industry Federation. “Consumers will now be able to make an informed choice.”

SMMT chief executive Christopher Macgowan adds: “The motor industry has shown its commitment to giving customers clearer information on environmental performance. Model by model comparisons will be made easier for new car buyers as a result.”

The initiative follows a voluntary agreement between vehicle manufacturers and the Low Carbon Vehicle Partnership, and was formally launched by Transport Secretary Alistair Darling at a recent LCVP conference.