New analysis shows that fuel economy policies work – but more is needed

While the average fuel economy of vehicles continues to improve, a new analysis by the Global Fuel Economy Initiative (GFEI) highlights that the rate of progress has slowed in recent years. The average amount of fuel required to travel 100 km improved by 1.1% in 2014 and 2015, down from 1.8% between 2005 and 2008, according to a new report launched in Washington today at the annual meeting of the Transport Research Board.

This change reflects the composition of global car sales, as Light Duty Vehicles sold in OECD countries use less fuel than those sold in non-OECD countries, and suggests a technological gap in engine technology between the two regions. However due to the popularity of large, heavy and powerful vehicles in the United States America and Australia, total fuel use per kilometre travelled in these countries remains greater than outside the OECD.

The new report is unique in its scope, covering more than 80% of the global vehicle market, and includes data on fuel economy trends from 2005 to 2015. The new findings were presented by Sheila Watson, GFEI Executive Secretary and Deputy Director of the FIA Foundation, and Pierpaolo Cazzola, an analyst at the International Energy Agency and the report’s lead author.

Ms Watson underlined that fuel economy policies work but more action is needed. She drew attention to the ongoing work that GFEI partners are undertaking to raise awareness of the importance of fuel economy, such as at the recent COP22 meeting in Marrakech, and the forty new countries that have jointed the initiative since the Paris Agreement in December 2015.

In his presentation, Mr Cazzola showed evidence that ambitious policy frameworks, including fuel economy standards and differentiated taxation by fuel economy, are linked with improved fuel economy. Without policies, most vehicle attributes – including fuel economy –  tend to stagnate, he said.

The analysis also includes for the first time a comparative assessment of vehicle prices, identifying significant differences in vehicle prices across the main markets, with vehicles sold in the OECD and China having prices well above those marketed in Brazil, India and Mexico.

It shows that achieving fuel economy reductions can come at a lower cost for consumers if efforts are focused on a wider segment of vehicles and power classes, where fuel economy performance is a secondary driver in the determination of vehicle prices. This suggests that provisions requiring greater relative fuel economy improvements in these vehicle classes offer greater opportunities to avoid passing the full cost of fuel economy improvement to consumers.

The Global Fuel Economy Initiative (GFEI) is a partnership of the International Energy Agency (IEA), United Nations Environment Programme (UNEP), International Transport Forum of the OECD (ITF), International Council on Clean Transportation (ICCT), Institute for Transportation Studies at UC Davis, and the FIA Foundation.