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GFEI report finds improvements in average new LDV fuel economy lagging pace required to cut 50% fuel use for new cars worldwide by 2030; policy focus should be on emerging markets

Vehicle size, a key determinant of fuel economy, has shown a reduction in OECD countries, while the non-OECD trend is toward bigger vehicles. Overall, there seems to be a convergence towards equal partition of vehicle sizes worldwide. Source: GFEI. Click to enlarge.

Worldwide, light-duty vehicle (LDV) fuel economy is not improving fast enough to cut average fuel use by 50% for all new cars by 2030, according to a working paper issued by the Global Fuel Economy Initiative (GFEI). (Earlier post.) Of particular concern for the GFEI is a lack of progress among non-OECD countries.

The analysis, an update of an earlier work using data from 2010 and 2011, found that the global average for light-duty vehicle fuel economy was 7.2 l/100 km (32.7 mpg US mpg) in 2011—an improvement of 1.8% per year from 2005 when the average was 8.0 l/100 km (29.4 mpg US). In the first edition of the report, published in 2011, the main finding highlighted that global fuel economy had improved by an average of 1.7% per year between 2005 and 2008. While the pace of improvement has slightly accelerated between 2008 and 2011, it lags behind the required 2.7% annual improvement rate that had been required to reach the GFEI target of a 4l/100 km (58.8 mpg US) global average by 2030 for new cars.

Fuel economy improvement (reflected as a reduction in g CO2/km) has been continuous and significant between 2005 and 2011 for most countries. Some key non-OECD market have stagnated during the time period. Source: GFEI. Click to enlarge.

In order to reach this level, average fuel economy now needs to improve globally by 3% per year. Reaching this level is ambitious but achievable, the paper noted; the enacted fuel economy standards around the world require annual improvements of up to 4.7%.

“The technical potential to reach the GFEI target has been demonstrated, but policies are needed to ensure these technologies are widely adopted in the mass market.”

The report—“International comparison of light-duty vehicle fuel economy: An update using 2010 and 2011 new registration data”—was published for the GFEI by the International Energy Agency (IEA) which is a partner in the initiative. The other GFEI partners are the UN Environment Programme, the International Transport Forum, the International Council on Clean Transportation and the Institute of Transportation Studies at UC Davis and the FIA Foundation an independent charity.

Between 2010 and 2011, global average new light-duty vehicle fuel economy improvement was about 0.5%, much lower than the 3% needed from now on to reach the 2030 target of average fuel economy of 4Lge/100km. A closer look at non-OECD countries reveals that they have improved at a higher rate than in the past, reaching 0.9%. In OECD countries, the improvement slowed down to only 0.5% compared to the 2.5% average annual improvement rate between 2005 and 2011. Looking at the individual country level, only Korea and Canada are showing rates below 0.5%.

This discrepancy between the strong improvements in individual countries and the weak improvement in OECD overall can be explained by market dynamics: on one hand the most efficient markets (e.g. EU, Japan) had significant reduction in their vehicle sales, and on the other hand, the least efficient markets (e.g. USA, Mexico, Chile to a lesser extent) had strong increases in their vehicle sales between 2010 and 2011. As different countries start from different fuel economy values in absolute terms, and the OECD market has seen more sales in countries with worse fuel economy during this time frame, the resulting average improvement was significantly slowed by this effect.

Changes in vehicles sales from one country to another can have a big impact on the weighted average for a region. No policies can easily address this issue and hence it is important that all markets converge towards a similar fuel economy target to avoid this market fluctuation effect. If all national sales number had evolved the same way, the improvement rate would have been of approximately 2.5%, much in line with the expected performance of the OECD region.

—“International comparison of light-duty vehicle fuel economy”

Engine power. The market share of medium powered vehicles between 50 and 100 kW is increasing both in OECD and non-OECD countries. Source: GFEI. Click to enlarge.   Engine displacement. The trend is toward smaller displacements (downsizing). Source: GFEI. Click to enlarge.

The report finds that from 2005 to 2011, the share of vehicles with medium-sized engines (between 50 and 100 kW) increased while the share of vehicles with large engines (above 150 kW) decreased. The average new LDV in non-OECD countries has less power than in OECD countries.

Globally, cars with medium-sized engines (1.2 to 2.0 liters) saw a strong increase between 2005 to 2011; vehicles with engines from 1.2 to 1.6 liters almost doubled their marked share. In OECD countries, vehicle sales with very large engines (above 3.2 liters) declined by around 50%. These vehicles are mainly sold in the US, Canada and Australia. In non-OECD countries, a trend towards medium-sized engines can be seen and the vehicle share with engines below 1.2 liters is declining. In non-OECD countries almost 90% of new passenger LDVs have engines below 2.0 liters; this market segment accounts for 60% of new vehicles in OECD countries.

As emerging markets are now growing much faster than their OECD counterparts, the priority should be placed in helping these countries to develop and deploy more stringent fuel economy policies, the report recommends.

While the OECD countries are on the right track, the report noted, they now need to sustain and even slightly accelerate improvements in fuel economy in order to meet the GFEI’s 2030 target. The report acknowledges the progress made in recent years regarding the interest, development and deployment of fuel economy policies and related vehicle technologies. This trend nevertheless needs to be sustained and accelerated in the near future, the report warns.

Globally, progress is being made on fuel economy but we now need to see an acceleration in the rate of improvement. Much more attention needs to be paid to emerging, non-OECD economies where the vehicle markets are now undergoing rapid growth. The technical capabilities to reach the target already exist, but policies are now urgently needed to provide sufficient inceptives to drive fuel economy improvements worldwide.

—Sheila Watson, Executive Secretary of the GFEI

The GFEI wants to see global new car fuel consumption cut by 50% by 2030 compared to 2005 levels, and the same cut across the whole fleet by 2050. This would mean by 2030 average new car fuel economy could be improved to close to 4l/100 km with a reduction of CO2 emissions from 186 gCO2/km on average to 93 gCO2/km—with the same improvement in all cars by 2050.




A couple of comments:

a: America has gone a long way since 2005 (according to the graph).

b: Non OECD has made little progress.

So the rich countries are going to pioneer low CO2 technologies, and hopefully they will become cheap enough for the developing world to adopt.

This may or may not happen, because most of the efficiency has been gained at the cost of complexity and more critical maintenance.
It is not like the adoption of mobile telephony which has been a huge hit in the developing world.

Anyway, lets see what happens.

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