International experience with greenhouse gas and fuel economy standards

Drew Kodjak, Executive Director

March 8, 2010 Mexico City, Mexico

The International Council on Clean Transportation (ICCT)

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The mission of the ICCT is to dramatically improve the environmental performance and efficiency of cars, trucks, buses, and transportation systems in order to protect and improve public health, the environment, and quality of life.

A Brief History   1973 - Middle East Oil Embargo   1975 - US Congress passes fuel economy CAFE standards   1997 - Global Climate Summit - Kyoto Protocol   1998 - European voluntary agreement to auto maker associations on

CO2 standards for passenger vehicles   1999 - Japan sets modest fuel economy standards for passenger

vehicles   2004 - California sets GHG standards for passenger vehicles.   2004 - China adopts fuel economy standards   2006 - Japan revises FE standards for passenger vehicles and sets

standards for commercial trucks   2009 - Europe sets mandatory CO2 standards   2009 - US proposes combined GHG / FE standards   2010 - Mexico hosts global climate change negotiations

United States

World’s First Fuel Economy Standards

US CAFE - Key Statistics   According to the National Academy of Sciences 2002 CAFE

study from 1975 to 2000: –  2.8 MBD reduction in US oil consumption, 1/3 less oil use

from passenger cars and light trucks, 14% reduction in US oil consumption.

–  100 million metric tons reduction in CO2, or 7% reduction in total US CO2 emissions.

  Several public opinion polls in 2005 - 2006 found very strong support for increasing fuel economy standards. –  Depending on the poll, between 77 - 86% supported

government policies to improve fuel economy. –  Public support was consistent across political parties and when

increased vehicle price was included in the question.

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Fuel Economy Policy: CAFE Corporate Average Fuel Economy (CAFE) standards and actual automobile fuel economy in the U.S., 1975-2005

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14

16

18

20

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28

30

1975 1980 1985 1990 1995 2000

Model year

Fuel

eco

nom

y (m

pg)

Actual Passenger carsCAFE Passenger carsActual Light trucksCAFE Light trucks

Cars

Light trucks

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Fuel Economy Policy: Sales Shift in CAFE Categories

Sales of automobiles for vehicle class: 1980-2008   Light trucks sales are increasing – except for when fuel prices are rising

Car sales

Light truck sales

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Fuel Economy Policy: Trade-Offs

Trade-offs for vehicle attributes: Efficiency, fuel economy, vehicle weight, and acceleration

CAFE is initially more demanding

Without new CAFE changes, vehicle improvements go toward size and performance

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20

25

30

35

1975 1980 1985 1990 1995 2000

Model year

Fuel

eco

nom

y (m

pg)

26

35

44

Vehi

cle

effic

ienc

y (to

n-m

pg)

Vehicle efficiency

Fuel economy

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Fuel Economy Policy: Trade-Offs

Trade-offs for vehicle attributes: Efficiency, fuel economy, vehicle weight, and acceleration

3000

3250

3500

3750

4000

4250

4500

1975 1980 1985 1990 1995 2000

Model year

Vehi

cle

wei

ght

(lb)

9

10

11

12

13

14

15

0-60

mph

acc

eler

atio

n tim

e (s

)

Vehicle weight

0-60 mph acceleration

CAFE is initially more demanding

Without new CAFE changes, vehicle improvements go toward size and performance

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U.S. FE/GHG Rulemaking: Cars

New federal U.S. standards for GHG emissions and fuel economy (approx) Different MY2016 target setting for Cars (~39 mpg, ~228 g CO2e/mi)

Footprint-based GHG/FE slopes will give different standards for different automakers

Performance by Vehicle Make and Model

Toyota Prius

Toyota Yaris

Toyota Camry Hybrid

Honda Civic Hybrid Smart Fortwo

Toyota CamryHonda Accord

Toyota CorollaHonda Civic

Dodge Charger

Chevy Impala

Ford Es cape Hybrid

Ford F-Series

Chevy Silverado

Dodge Ram

Honda CR-V

Honda Odys sey

Toyota Highlander

100

150

200

250

300

350

400

450

500

10203040506070Rated fuel economy (miles/gallon)

GH

G e

miss

ion

rate

(g C

O 2

e/m

ile)

30 highest selling light truck models 30 highest selling pas senger car models Models achieving overall MY2016 target (35.5 mpg)

35.5 mpg

250 g CO 2 e/mile

Nis san Altima

Ford Focus 26.2 mpg

339 g CO 2e/mile

Sales-weighted average MY2008 light-duty vehicles

•  Pay attention to best selling models •  Size and weight largely determine performance •  Hybrids are an important technology

Europe

World’s First CO2 standards

European Integrated Approach   Overall objective to reduce GHG emissions by 20 / 30% by 2020 from

1990 levels.   Transportation is Europe’s second largest sector.   Integrated Approach

–  Vehicle standards –  Consumer information (labeling) –  Fiscal measures

  CO2 regulatory design should be “competitively neutral” and maintain ability of car market to “cater to different consumer needs.” (Regulation EC 443/2009).

  130 g/km standard + 10 g/km complimentary measures (technologies and biofuels) by 2015

  Eco-innovation to promote measures outside of test procedure.   Target - 95 g/km by 2020 with technology review in 2013.

European LDV Fleet g/CO2 by Manufacturer

100

150

200

250

300

1000 1100 1200 1300 1400 1500 1600 1700average mass [kg]

aver

age C

O2 [g

/km]

Fiat

Porschet

Subaru

Suzuki

DaimlerChrysler

BMWMitsubishi

Ford

Mazda

Hyundai

Volkswagen

Nissan

PSA Renault

Toyota

GM

2006 trendlineaverage mass

Honda

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Determining the limit value curve

  Starting point: 2006 trend line

  Scale the curve to achieve 130g/km average in 2012

  Option 1 sets a uniform target (0% curve)

  Slope of the limit value curve is maintained at 60%.

  Slope is a distribution parameter, not primarily an environmental parameter.

0

50

100

150

200

250

300

350

400

500 1000 1500 2000 2500 3000 3500

weight [kg] (AWI assumption 0,82% p.a.)

CO

2 em

issio

n lim

it va

lue

[g/k

m]

Option 2 slope 120%Option 2 slope 100%Option 2 slope 80%Option 2 slope 60%Option 2 slope 40%Option 2 slope 20%Option 12006 trend line

21%

21%

2020 “Target” of 95 g/km

CO2 from cars: EU reduction

0

20

40

60

80

100

120

140

160

180

200

1995 2000 2005 2010 2015 2020

Ave

rage

em

issi

ons

[g/

km]

0

2

4

6

8

10

12

14

16

18

20

Impr

ovem

ent r

ate

[g/

km p

er y

ear]

7 years

Japan

Top Runner Program to Improve Fuel Economy Of Passenger Vehicles and Commercial Trucks

Japan Top Runner Standards

  Kyoto Protocol obligation 6% below 1990 levels.   Transportation is 20% of CO2 emissions   First standards set in 1999 with modest standards for 2010.   In 2004, 80% of petrol vehicles met the 2010 standards, in

part due to supportive green tax policies.   In 2005, new standards for 2015 were developed along with

important regulatory changes. –  Fuel Neutral: separate standards for petrol and diesel vehicles

were combined into one standard. –  Credit trading across all bins: 1999 regulation did not allow

trading across compliance bins, and thus did not promote overachievement.

–  New test procedure to reflect real world conditions.

Methodology for Top Runner Fuel Efficiency Standard (Example for one weight class )

Fuel efficiency (km/L)

Sale

s Vol

ume

in J

apan

ese

Mar

ket

Top level

Technology Improvement In the future

Standard value

Improvement toward the top

level

Average

Present Target year for standard value

Standard value is decided by two-step approach.

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Source：JAMA

Estimated in 1998

Estimated in 1998

Variable valve timing

Penetration Rates of Efficiency Technologies To Meet the 2010 Standards

12 Source：METI, MLIT

Average Fuel Efficiency 2015 Targets for Vehicles

Passenger cars

Commercial

Vehicles

(GVW≦3.5t)

Buses (11passengers＜ & GVW≦2.5t)

Target :

Target :

Target :

2004 Performance :

2004 Performance :

2004 Performance : 8.3km/ℓ

Improvement rate 23.5%

Improvement rate 12.6%

Improvement rate 7.2%

Calculated on the basis of weighted average values of fuel economy performance for the respective vehicle weight categories, assuming the same respective shipment volume ratios for 2015 as those recorded in 2004.

Global Perspective and

Lessons Learned

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Differences in US, EU and Japan Fleets

Attribute Japan Europe U.S.

Vehicle weight (kg) 1245 1334 1875

Engine size (L) 1.5 1.7 3.3

Vehicle size (m2) - - 4.5

Fuel economy (km/L) 17.3 17.2 11.1

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Technology Differences: U.S. and Mexico   U.S and Mexico fleets are similar in size and fuel economy

–  But, for 2008 vehicles, there are several notable technology differences…

Technology/variable Mexico United States

Fuel economy (km/L) 11.8 11.1

Vehicle footprint size (m2) 4.0 4.5

Engine size (cylinders / displacement) 4.6 / 2.4L 5.6 / 3.3L

Engine

Specific power (kW/L) 49.1 50.0 Percent 4 valves/cylinder 68% 74% Variable valve timing/lift 20% 53% Cylinder deactivation 0.3% 6% Direct injection gasoline 0.3% 4%

Transmission Auto/manual 57%/43% 95%/5% 6+ gears 9% 21% Continuously variable (CVT) 2% 8%

Percent hybrids 0.03% 2.2%

Percent diesels 3% 0.1%

Lessons for US, EU, and China Programs   Fuel economy standards can be extremely effective at

reducing oil use and GHG emissions.   Competitiveness is an important consideration, and

attribute-based standards help with competitiveness concerns.

  Voluntary standards have a poor track record.   Fuel economy or CO2 standards will favor diesel vehicles to

the detriment of public health if diesels are not held to the same emission standards as petrol vehicles.

  Setting separate standards for car and more lenient standards for trucks can lead to market distortions and gaming.

  Long-term targets signal corporate investment in technologies and changes to fleet mix.

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Drew Kodjak

International Council on Clean Transportation (ICCT) 1225 Eye St. NW

Suite 900 Washington D.C. 20005

drew@theicct.org