Comparing Approaches to Light-Duty Fuel Economy/GHG Standards in the U.S., EU & China

Download the PDF of the report here.

Password: FutureFuel2018 (case sensitive)

In the last year, four countries proposed or set new fuel economy and CO2/GHG regulations: the U.S., Canada[1], EU and China. Other countries are also at various stages in setting fuel economy regulations, some for the first time, and that will be the subject of a separate post. This post focuses on the U.S., EU and Chinese approach to setting fuel economy/GHG standards. While the Trump Administration is prepared to hold standards at MY 2020 levels through 2026, it also seems poised (in true Trump fashion) to make a deal with stakeholders, including the auto industry and the state of California.

Meantime, the European Commission proposed to reduce CO2 from vehicles by 30% by 2030, but the Environment Committee of the Parliament has decided to push even further to facilitate the transition to zero emission vehicles (ZEVs). The full Parliament will vote on the proposal next month, and I do expect there could be changes to the Parliament’s proposal. The primary concern expressed by the auto industry aside from its very feasibility involves jobs that could be affected by the proposal. This is not going to be taken lightly by member state European Council members with auto manufacturing in their countries.

How do the proposals in the U.S. and EU (the Commission’s) stack up? The table below provides a comparison for the years 2021 and 2025.

Table 1: Comparing the U.S. and EU Commission Fuel Economy Target Proposals in the Years 2021 and 2025

Finally, China has charted its own course by setting fuel economy/GHG standards and the first-ever nationwide ZEV mandate under its New Energy Vehicle (NEV) policy. The ZEV mandate is similar to California’s where credits can be generated and deficits must be made up.

The approaches in these three countries are summarized and analyzed in the attached post, which has been linked as a PDF for easier viewing and downloading since there are numerous graphs and tables.

[1] It’s not clear yet what path Canada will follow: will it stay the course and continue to implement the Obama Administration policy, or start over and adopt whatever the Trump Administration finally implements? The government released a discussion paper in August for public comment on exactly these questions.