The UK has beaten CO2 emissions targets, with the average new car in 2014 posting CO2 emissions 4.2% below this year’s EU-wide target of 130g/km, according to a Society of Motor Manufacturers and Traders (SMMT) report.

The annual SMMT New Car CO2 Report 2015 reveals that carbon tailpipe emissions have fallen for the 17th consecutive year to an all-time low. In 2014, new cars averaged 124.6g/km, beating last year’s record average by 2.9% and 2007 levels by almost a quarter (24%).

The report says the shift to more efficient diesel and petrol engines has been critical to this success, while significant growth of the alternatively fuelled vehicles (AFV) market has also contributed.

Sales of plug-in vehicles increased fourfold to 14,498 in 2014 and, for the first time, the UK was ahead in Europe, registering more new plug-ins than any other country. By the end of the year, there were 52,000 AFVs, including hybrids, plug-ins and range extenders, on the road – a 58.1% increase on 2013.

The New Car CO2 Report shows that in 2014, more than two thirds of new cars (68.6%) met or fell under the 130g/km EU threshold, compared with just 0.9% in 2000, with buyers of these cars benefiting from a £0 first year Vehicle Excise Duty (VED) rate.

SMMT chief executive Mike Hawes said: “The UK automotive sector has made enormous strides in cutting emissions across the board and should be proud of its achievements. However, there is a long way to go, and meeting ambitious targets in 2020 will require ongoing support and investment.

“Striking the delicate balance between influencing buying behaviour, encouraging investment and maintaining critical tax income will be a big challenge. SMMT is committed to working with the next government to make the changes now that will help the industry meet the even greater cuts in CO2 demanded in the future.”