Volvo V40 Sludge and VANOS Issue

VANOS issues on that engine are nasty. High fuel consumption + check engine light strongly suggests the variable timing isn't working correctly. Did you check for error codes? Also, when was the last time you changed your oil? Sludge build-up IS a real concern with these engines and can definitely affect the VANOS.

Yes, I retrieved error codes pointing towards the inlet camshaft solenoid. The oil was changed about 8,000 km ago, but perhaps the previous owner wasn’t so diligent with maintenance. Is it likely that this sludge buildup requires workshop level reparations, and might be indeed be the only reason for the malfunction?

Solenoid errors usually mean either electrical fault or mechanical sticking. Since you saw the high fuel consumption, and the error codes point to the solenoid, it's probably jammed. Given the mileage, the odds are definitely pointing towards sludge. Best to get it checked – trying to ‘fix’ it yourself without proper cleaning could wreck the whole system. Expect to pay around 250€ for repair.

I took your advice and brought the car to a trusted workshop. They confirmed the sludge build-up and replaced the faulty solenoid. The issue has been resolved and the car runs smoothly. The repair cost was almost exactly as you predicted! Lesson learned: maintain your engine!