40+ Countries Developing Light-Duty Vehicle Fuel Economy Standards

05.03.19 | Blog | By:

Only four governments 10 years ago had introduced mandatory GHG emission and/or fuel economy standards: China, Japan, South Korea, and the United States, while the European Union and Canada had announced their intention to introduce such standards though neither had a legislative framework in place. Today Brazil, Canada, China, the EU, India, Japan, Mexico, Saudi Arabia, South Korea, and the U.S. have established fuel economy or GHG emission standards for light-duty vehicles (LDVs). All are among the top 15 vehicle markets worldwide: nearly 80% of new LDVs sold globally are currently subject to some kind of GHG emission or fuel economy standards. (Read more here about those standards.) Several countries have set heavy-duty vehicle fuel economy standards as well. (Future Fuel Outlook members: see report Mar. 19, 2019)

A recent report for Future Fuel Outlook members focused on an in-depth review of fuel economy/GHG standards proposed in the U.S. and recently finalized in the EU and China. But what about progress in the rest of the world? Several countries in the last year including Kenya, Chile, the Philippines and Thailand have implemented LDV fuel economy policies. In addition, more than 40 countries are now in the process of developing LDV fuel economy standard policies that will be implemented in the next few years. Many of these countries are in Africa where urbanization, motorization, vehicle miles traveled and oil demand are increasing. Figure 1 provides a status update on LDV fuel economy standard setting globally. I estimate that by the time these policies are implemented about 90% of the global vehicle market will be covered.

Figure 1: Global LDV Fuel Efficiency Improvement

In addition to standards, many countries have set labeling requirements that accompanying the fuel economy standards, shown in Figure 2.

Figure 2: Fuel Economy Labeling Scheme Implementation Globally, 1978-2020

Source: ICCT, June 2018

Accompanying these policies, I notice that countries are beginning to get more serious about restricting the import of older, less fuel efficient vehicles and some are also setting feebate policies to encourage consumers to purchase more fuel efficient vehicles. Figure 3 shows a compilation of these countries and includes those with labeling schemes as well.

Figure 3: Labeling, Feebate and Import Restriction Schemes to Supplement Fuel Efficiency Standards

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