BMW has now launched an executive saloon with a CO2 emissions level below 120g/km.

Although it’s not the first at this level – Volvo‘s S80 Driv-e has been at 119g/km for a while – the BMW offers 184hp and a 0-62mph acceleration time of 8.2secs, compared with the Volvo’s 115hp and 11.5secs.

Unlike the 320d Efficient Dynamics, which offers CO2 of 109g/km but is 21hp down on the standard 320d, the 520d ED offers the same 184hp as the ‘normal’ 520d SE saloon on which it’s based, but is in a lower BIK band compared with the standard car’s 125g/km.

Like the 320d ED, the lowest-emitting 5-series comes only as a manual saloon, as auto and estate cars are too difficult to get below 120g/km for now. That will impact on the 520d ED’s influence more than its smaller counterpart, as a higher percentage of 5-series buyers want an automatic.

The lower emissions for the new ED variant are achieved through a series of small steps including low rolling-resistance tyres with streamlined alloys and a longer final drive gear ratio for lower revs at motorway speeds. The 520d ED also has a dual mass flywheel to reduce engine vibration, encouraging drivers to change up a gear earlier.

Another innovation is BMW’s Eco-Pro mode. Activated by the driver, it modifies engine mapping, throttle sensitivity and the amount of electricity consumed by items such as climate control and, where fitted, heated seats. The system noticeably impacts performance, but means drivers can switch to eco mode to maximise efficiency when they don’t need the extra performance, but come out of it when they do.

The good news is that, both to drive and to look at, the ED model is undistinguishable from the standard 520d, and makes the manual saloon version redundant. Although the ED 520d is £405 more expensive, thanks to 62.8mpg versus the 58.9mpg of the standard 520d, the fuel cost alone over 60,000 miles will be £402 less at current fuel prices, according to KwikCarcost figures. And that’s before a driver BIK saving of £48 per month for a higher rate taxpayer between now and when the bands change next April. After that, the saving will be less, but still £18 per month. KwikCarcost predicts the Efficient Dynamics version will have a significantly better RV of 36.0% against a standard car’s 31.0%. The overall result of the costs equation is that the new ED model comes in 0.7p cheaper than the SE at 65.1p per mile, but both lose out to Audi‘s 177hp 2.0 TDI A6 saloon, which, although less efficient, makes up the difference with lower SMR and insurance costs and a better RV.

However, the first German executive saloon under 120g/km is impressive and doesn’t require any compromise, apart from on behalf of the taxman. The competition is better than ever, but so is the 520d.