Summary of experience in North America, Europe, and Japan with setting standards for vehicle fuel economy and greenhouse gas emissions.

1. International experience with
greenhouse gas and fuel economy
standards
Drew Kodjak, Executive Director
March 8, 2010
Mexico City, Mexico

2. The International Council on Clean Transportation (ICCT)
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.
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3. 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

4. United States
World’s First Fuel Economy Standards

5. 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.

6. Fuel Economy Policy: CAFE
Corporate Average Fuel Economy (CAFE) standards and actual automobile fuel economy in the U.S., 1975-2005
30
28
26
Cars
Fuel economy (mpg)
24
22
20 Light trucks
18
Actual Passenger cars
16 CAFE Passenger cars
Actual Light trucks
14
CAFE Light trucks
12
1975 1980 1985 1990 1995 2000
Model year
6

7. 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
7

8. Fuel Economy Policy: Trade-Offs
Trade-offs for vehicle attributes:
Efficiency, fuel economy, vehicle weight, and acceleration
CAFE is initially Without new CAFE changes, vehicle
more demanding improvements go toward size and performance
35 44
Vehicle efficiency
Fuel economy (mpg)
30
Vehicle efficiency
(ton-mpg)
25 35
Fuel economy
20
15 26
1975 1980 1985 1990 1995 2000
Model year
8

9. Fuel Economy Policy: Trade-Offs
Trade-offs for vehicle attributes:
Efficiency, fuel economy, vehicle weight, and acceleration
CAFE is initially Without new CAFE changes, vehicle
more demanding improvements go toward size and performance
4500 15
0-60 mph acceleration time (s)
4250 14
0-60 mph
acceleration
Vehicle weight (lb)
4000 13
3750 12
3500 11
Vehicle weight
3250 10
3000 9
1975 1980 1985 1990 1995 2000
Model year 9

10. 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
10

11. Performance by Vehicle Make and Model
500
30 highest selling light truck models Dodge Ram
30 highest selling pas senger car models Ford F-Series
e/mile)
450 M odels achieving overall M Y2016 target (35.5 mpg) Chevy Silverado
Honda Odys sey
2
400
Dodge Charger
GHG emission rate (g CO
339 g CO 2e/mile Toyota Highlander
350
Chevy Impala
Honda CR-V
300 Nis san A ltima
Honda A ccord
250 g CO 2 e/mile Toyota Camry
250 Ford Focus
Honda Civic
26.2 mpg
Toyota Corolla
200 Toyota Yaris
Ford Es cape Hybrid
Toyota Camry Hybrid
35.5 mpg
150 Smart Fortwo
Honda Civic Hybrid Sales-weighted average
Toyota Prius M Y2008 light-duty vehicles
100
70 60 50 40 30 20 10
Rated fuel economy (miles/gallon)
• Pay attention to best selling models
• Size and weight largely determine performance
• Hybrids are an important technology

12. Europe
World’s First CO2 standards

13. 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.

14. European LDV Fleet g/CO2 by Manufacturer
300
Porsche
2006 trendline t
average mass
250
Subaru
average CO2 [g/km]
Mitsubishi BMW
Mazda
GM Daimler
200 Nissan Chrysler
Suzuki
Toyota
160
Volkswagen
150
Hyundai
Fiat
Ford
PSA Renault Honda
100
1000 1100 1200 1300 1400 1500 1600 1700
average mass [kg]

15. Determining the limit value curve
400
 Starting point: 2006 trend Option 2 slope 120%
line Option 2 slope 100%
350
 Scale the curve to achieve Option 2 slope 80%
130g/km average in 2012 Option 2 slope 60%
CO2 emission limit value [g/km]
 Option 1 sets a uniform 300
Option 2 slope 40%
target (0% curve) Option 2 slope 20%
21%
 Slope of the limit value 250 Option 1
curve is maintained at 2006 trend line
60%. 200
 Slope is a distribution
parameter, not primarily 21%
150
an environmental
parameter.
100
50
0
500 1000 1500 2000 2500 3000 3500
weight [kg] (AWI assumption 0,82% p.a.)

16. 2020 “Target” of 95 g/km
CO2 from cars: EU reduction
200 20
7 years
180 18
Improvement rate [g/km per year]
160 16
Average emissions [g/km]
140 14
120 12
100 10
80 8
60 6
40 4
20 2
0 0
1995 2000 2005 2010 2015 2020

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

18. 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.

19. Methodology for Top Runner Fuel Efficiency Standard
(Example for one weight class )
Average Top Standard
level value
Sales Volume in Japanese Market
Improvement Standard value is
toward the top decided by two-step
level
Technology
approach.
Improvement
In the future
Present Target year for
standard value
Fuel efficiency (km/L) 13

20. Penetration Rates of Efficiency Technologies
To Meet the 2010 Standards
Variable valve timing
Estimated
in 1998
Estimated
in 1998
Source JAMA

21. Average Fuel Efficiency 2015 Targets for Vehicles
Passenger Target :
cars
2004 Performance : Improvement rate 23.5%
Commercial Target :
Vehicles
2004 Performance : Improvement rate 12.6%
(GVW 3.5t)
Buses Target :
(11passengers
2004 Performance : 8.3km/ℓ Improvement rate 7.2%
& GVW 2.5t)
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.
Source METI, MLIT
12

22. Global Perspective
and
Lessons Learned

23. Slide 23

24. 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
24

25. 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
Specific power (kW/L) 49.1 50.0
Percent 4 valves/cylinder 68% 74%
Engine Variable valve timing/lift 20% 53%
Cylinder deactivation 0.3% 6%
Direct injection gasoline 0.3% 4%
Auto/manual 57%/43% 95%/5%
Transmission
6+ gears 9% 21%
Continuously variable (CVT) 2% 8%
Percent hybrids 0.03% 2.2%
Percent diesels 3% 0.1%
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26. 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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27. Drew Kodjak
International Council on Clean Transportation (ICCT)
1225 Eye St. NW
Suite 900
Washington D.C. 20005
drew@theicct.org
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