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Bert Fabian, Programme Officer, Transport UnitUN Environment Programme

Global Fuel Economy Initiative

Outline

• Background and introduction to fuel economy– Benefits and impacts

• Developing national fuel economy policies– Setting a baseline– Technical information and policy options

• GFEI Country Activities

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GFEI and UNEPGlobal Fuel Economy Initiative (GFEI)• Established in 2009 • UNEP, FIA Foundation, International Energy Agency,

International Transport Forum, University of California Davis, International Council for Clean Transportation

• Objective: At least double the efficiency of the global fleet from an average of 8L/100 km to 4L/100 km by 2050

UNEP’s role in the GFEI• Co-founder of GFEI• Leader in the UN on Climate Change and Transport• Support to countries to develop fuel economy policies• Focus on middle and low income countries• Technical, policy, financial, networking support

The Contribution of Transport

Growth of light-duty vehicles between 2005 and 2050

Almost all growth is in developing countries

Source: IEA Energy Technology Perspectives, 2012

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 20500

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Deep Transport CO2 Reductions in ETP-2012 2 Degree Scenario (2DS)Fuel economy improvement plays largest role, particularly through 2030

Meeting GFEI targets can stabilize global light-vehicle CO2 emissions, despite a near tripling of vehicle fleet

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Types of Air Pollutants

Air pollutants affecting human health

• NOx• Non-methane

hydrocarbons• particulates• carbon monoxide• Toxic emissions (e.g.

benzene)• Heavy metals

Air pollutants affecting the climate• CO2

• Methane• Black carbon• N20

Fuel quality / tailpipe controls

Fuel economy improvement

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What is fuel economy?

• Vehicles use energy, and fuel economy measures energy per unit of vehicle travel. It is the RATE of energy use.• Litres per 100km (Europe)• Km per litre (Japan)• Miles per gallon (United States)

• Fuel economy, fuel efficiency, fuel intensity are all fairly interchangeable terms. But fuel economy always refers to fuel use relative to distance travelled.

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What is fuel economy? (2)

• Fuel economy improvement can be achieved through • Technical changes to vehicles• Changing the types of vehicles bought• Improving vehicle maintenance• Changing the way vehicles are driven (ecodriving)• Reducing traffic congestion

• Fuel economy improvement to vehicles should be part of a broader strategy:• Traffic management• City and regional planning• Promotion of public transit• Etc.

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GFEI Targets

Why Countries need to improve fuel economy?

• Reduce pollutant emissions• Reduce oil dependence• Improve balance of payments• Reduce transport cost consumers and

companies• Reduce cost public transport• Reduce greenhouse gases• Promote domestic economies/jobs

Global Progress on Fuel Economy Policies (2014)

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Potential Fuel Economy Improvements to 2030

From the U.S. NRC 2013 report:

• Light-weighting of up to 25% in 2030, 50% in 2050 relative to 2010

• High efficiency accessories (e.g. air conditioning, lighting, tires)

• High efficiency engines (including but not limited to hybridization)• E.g. 25% improvement from turbocharged, downsized direct

injection gasoline engines

• Overall Impacts:• By 2030, potential for 50% reduction in fuel consumption/CO2 per

km at $2000-3500 per vehicle (through hybridization)• 66% reduction by 2050 at somewhat higher cost

© OECD/IEA 2012

Fuel Economy Improvements are Cost-effective

Fuel savings more than pays for fuel economy improvements in light-duty vehicles

Source: IEA Fuel Economy Roadmap, July 2012

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Improving efficiency can save $billions

Countries could dramatically cut their fuel import bills in the future…

Source: IEA World Energy Outlook 2012

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Global Benefits to 2050 from Hitting GFEI Targets (Compared to a frozen baseline; based on IEA ETP 2014 Projections)

In 20502005-2050 Cumulative

Fuel savings (trillion Litres) 1.4 33

CO2 reduction (gigatonnes) 3.8 85

Cost savings (USD trillions) $ 1.2 $ 27

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Fuel economy improving, but not fast enough…

© OECD/IEA 2012

FE trends & market size

Significant fuel economy improvement if policies are in place Size shift vs. technology evolution moderates Non-OECD improvement Growth of markets with worse fuel economy affects global trend

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Passenger Car CO2 Standards Globally

Progress towards 2030 GFEI target(We’re about half way there; next several years are critical)

Developing National Fuel Economy Policies

Developing Automotive Fuel Economy Policy at the National Level:

Areas of GFEI Support

I. Plan & Design

Build National Partner Capacity re: Auto Fuel Economy Issues and Approaches Auto Fuel Economy Baseline + Projection

o Data gathering and analysis o Communication and publication of data results o Identification of trends

Coalition Building and Consultation o Private sector participation o Intra-governmental working group(s) o National working sessions

Policy Choice and Design o Consideration of feasible policy options:

Standards (yes/no?) Fiscal instruments (e.g. fee bate) Information (e.g. labeling)

Propose and Communicate National Plan o Drafting of plan o High Level consultation o Presentation to relevant government agencies

II. Implement

Continued Support for National Discussions on Fuel Economy Sustained political pressure and lobbying for fuel economy

Introduction of Draft Plans to National Committee(s), Working Groups Adoption into National Policy Adoption into Law, Official Gazette Development of Standard by Standards Body

III. Monitor

Yearly National Auto Fleet Fuel Economy Measurements Oil use, import data and road transport (LDV) use

IV. Evaluate

Refinement of national policy, standards according to evidence and trends

GFEI:

Technical Expertise

Financial Support

Global Networking

How GFEI Can Help

• Tools– Baseline setting– Overall GFEI toolkit– Policies impact tool– Fee bate tool

• Expert Network & Regional Partners• Sharing Best Practices• Publications

– State of the World Fuel Economy• Financial support

– GEF, EU, GFEI Partners, ….

www.unep.org/transport/gfei/autotool

GFEI Toolkit

• Examples of Auto Fuel Economy Policies• Policy Briefs (fee bates, imports, labels) • Technical Guides (fuels, vehicles, calculating

emissions)• www.unep.org/transport/gfei/autotool

GFEI Toolkit (2)

Setting a Baseline

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Developing a fuel economy baseline for the light-duty vehicle fleet

Baseline – Kenya example

Baseline – Country examples Ethiopia 2005 2008 2010 Average (l/100km) 8.4 8.4 7.9 Diesel 9.3 9.4 9.0 Petrol 7.8 7.4 6.9 Kenya 2005 2008 Average (l/100km) 7.69 7.6 Diesel 8.67 9.09 Petrol 7.52 7.2

Slide 31

Comparison of passenger vehicle GHG standards

Kenya

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Technical Information and Policy Options

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Fuel economy policies – 4 keys

• Fuel economy labeling• Based on tested fuel economy• Need to make available to consumers

before purchase (internet, car window stickers)

• Fuel pricing• Taxation system should at least

internalize externalities• CO2 tax will help differentiate fuels as

well as encourage fuel economy

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Fuel economy policies – 4 keys

• Fuel Economy Standards• Typically corporate average standards• Typically either vehicle mass or size based• Could be applied to 2nd hand vehicles

• Vehicle purchase taxes• Sales tax, registration tax, import duties• Can be differentiated by fuel economy or

CO2 emissions• Germany also differentiates by pollutant

emissions levels

Fuel Economy Policies lmpact Tool (FEPIt)

• simulation tool that assists users in setting auto fuel economy targets

• by estimating the impact of fuel economy policies• Estimates what a set of fuel economy policies (and their

level of ambition, low-high) can deliver in terms of average auto fuel economy in 5-10 + years

• Available with User Guide from: www.unep.org/transport/gfei/autotool/nextsteps/estimating_policy_impacts.asp

FEPIt example: Georgia

1. Baseline auto import fuel economy data for 2008, 2010, 2012

2. Baseline FE policy situation as of 2012:• Moderate fuel tax in place• No fuel economy label• No registration / ownership tax based on CO2• No restriction on used imports (age)• No FE standard

….

RESULTS:

Policy Options Today 2020

Choose your countryGeorgia Policy ImpactFuel Options

Fuel Tax 1 3 Moderate Tax3 High Tax 4 Important

Fuel tax differentiation 3 1 None 1 High 4 Important(lower tax for diesel)

Vehicle Options3 1 None 1 High 4 Important

CO2-Based Vehicle acquisition tax 3 1 None 1 High 4 High

CO2-Based Vehicle ownership tax 3 1 None 1 High 4 Very High

Used Imports restriction 2 2 Low 2 High 4 Small

Labelling

To be deployed by

2020 expected FEif policy status quo 175 gCO2/km

if policies implemented 145 gCO2/km

Where is Georgia heading?

Georgia BAU

Source: adapted from ICCT

Georgia w/FE policy

Using Economic Instruments

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Upcoming: Feebate Simulation Tool

Design of a feebate system

$

g/km CO20FEE

REBATE

slope determines marginal costs and benefits

pivot point can be designed to meet revenue goals

FEE

Example : Mauritius

• Increasing fleet – almost doubled in 10 years; increasing need for petroleum imports; increasing air pollution

• Introduced cleaner fuels - unleaded and low sulfur fuels (50 ppm)

• Introduced a carbon tax:– FEE: 159 CO2 gr/km: Rs 2,000 per gm/km

going to Rs 5,000 above 290 gm/km– REBATE: 158 gm/km: Rs 1000 going to Rs

3,000 below 90 gm/km– Now further tightened to 150 gm/km

GFEI Country Activities

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GFEI Country EngagementPilot CountriesChile

Ethiopia

Indonesia

Kenya

Second Phase CountriesBahrain

Côte d'Ivoire

Egypt

Georgia

Jamaica

Jordan

Macedonia

Mauritius

Montenegro

Morocco

Peru

Philippines

Thailand

Uruguay

Vietnam

Under DiscussionSerbia

Barbados

Benin

Russia

St Lucia

Countries Expressing InterestArmenia

Azerbaijan

Bangladesh

Guatemala

Mali

Mozambique

Nigeria

Paraguay

Sri Lanka

Syria

Togo

Uganda

Zambia

Colombia

Costa Rica

Malaysia

Nepal

Bert FabianTransport Unit Division of Technology, Industry and EconomicsUnited Nations Environment Programme (UNEP)

bert.fabian@unep.orgwww.unep.org/transportwww.globalfueleconomy.org