This paper identifies trends in new gasoline and diesel passenger car characteristics in the European Union between 1995 and 2009. By 2009 diesels had captured over 55% of the new vehicle market. While the diesel version of a given car model may have as much as 35% lower fuel use/km and 25% lower CO2 emissions than its gasoline equivalent, diesel buyers have chosen increasingly large and more powerful cars than the gasoline market. As a result, new diesels bought in 2009 had only 2% lower average CO2 emissions than new gasoline cars, a smaller advantage than in 1995. A Laspeyres decomposition investigates which factors were important contributors to the observed emission reductions and which factors offset savings in other areas. More than 95% of the reduction in CO2 emissions per km from new vehicles arose because both diesel and gasoline new vehicle emissions/km fell, and only 5% arose because of the shift from gasoline to diesel technology. Increases in vehicle mass and power for both gasoline and diesel absorbed much of the technological efficiency improvements offered by both technologies. We also observe changes in the gasoline and diesel fleets in eight EU countries and find changes in fuel and emissions intensities consistent with the changes in new vehicles reported. While diesel cars continue to be driven far farther than gasoline cars, we attribute only some of this difference to a "rebound effect". We conclude that while diesel technology has permitted significant fuel savings, the switch from gasoline to diesel in the new vehicle market contributed little itself to the observed reductions in CO2 emissions from new vehicles. (C) 2012 Elsevier Ltd. All rights reserved.