Fuel Consumption of Cars and Vans – Analysis - IEA (2023)

The amount of energy required to move a vehicle, which ismostlybased onitssize and weight, is a key determinant of fuel consumption. In general, larger and heavier vehicles require more energy,as well asmore power,to provide adequate acceleration.

While advances in vehicle technologyimprovedtherated fuel consumptionof allnew vehicles from 2010 to2019,a large shareofthese fuel savingshasbeen offset by increased vehicle weightandpower(vehicle attributes).The share of technical improvements that have been nullifiedbygreatervehicle size and power range from 40% in the UnitedStates, China and Europe, to 17% in India.

Fuel consumption is also determined by how efficientlyavehicle’s powertrain converts fuel into energy. Some powertrains are more efficient than others,resulting in differences in fuel consumption. Electric powertrains are more efficient than hybridones, followed by diesel and gasoline engines.

Changes in the market share of powertrain technologiesbetween 2010 and 2019(whether towardsgreateror lesserefficiency)havenot had a major impact on average fuel consumption in most markets.In Europe,higher fuel consumptionstemming fromconsiderably fewerdiesel powertrainsin usehas been offset by increases in hybrid and electricvehicles.In China, hybrid and electric powertrainuptakeoffsethigherfuel consumptiondue toa decrease in the market share of flex-fuel vehicles.

The overall increase in the average weightof vehicles sold globally stems fromadecline in the sales share of city and medium-sizedcars, accompanied by a massive shift toward SUVs.In fact, the sales share of small and large SUVs and pick-up trucksexpandedfrom 20%in 2010to almost 45% in 2019.Market share growth of small SUVshas beenthe greatest, and theywerethe mostpopularsegment in 2019.

While theSUVisationtrend is global,sales sharesof SUVs in 2019werethe highest in Canada (67%), Australia (66%) and the United States (65%). Sales shares remained below 40% in the largest car markets in Europe in 2019, while Japanhadthe lowest rate of SUV adoption. In contrast,China’sSUV sales shares have expanded the most, growing from 10% in 2010 to 42% in 2019.

Whilethe rise in SUVpopularityhas decelerated in the last two years,theirshare in total car salesis~3%higher than in 2019.Targeted policies arethereforeneeded to reversestallingfuel economy improvements, withmeasuresthataccelerate the adoption of efficient powertrain technologies and disincentivise the sale of vehiclesof ever-increasing size and weight.

Introduced in 2020, theSafer Affordable Fuel-Efficient (SAFE) Vehicles Ruleset Corporate Average Fuel Economy (CAFE) standards that were significantly less stringentthanprevious standards.TheSAFERuleestablished an annual fuel economy improvement rate of 1.5% for model years 2021-2026, while previousstandardsrequired a4.7% yearlyimprovementfor model years 2017-2025.TheSAFERulealso phased out the GHG credit multiplier for EVs in 2022 and extended the multiplier for natural gas vehicles to 2026.

InJanuary2021, the new US administration issued anexecutiveorderdirecting the EPA to reconsidertheSAFEprogramme, and in August 2021 arevision was proposedto establishmorestringentstandards starting in 2023. ComparedwithSAFE, the proposed standards represent a 10% greater improvement formodel year 2023 anda5% improvement in the years following. The revision proposesremoving the natural gas multiplier and extending the credit multiplier for electric vehiclestomodel year2025.Final ruleswill be established in December2021.

Canada aligns its standardscloselywiththose ofthe United States, and in response hasannounced that it will remain committed to adopting regulationswith the most stringent performance standards in North Americapost-2025.

Under itsCorporate Average Fuel Consumption (CAFC)scheme,Chinahasprogressively strengthenedits targets. In 2021, China set CAFC targetsof 4.0 L/100 km for 2025 and 3.2 L/100km for 2030(China-NEDC test cycle). Thesetargetswill require annual fuel consumptionreductionsof 6.5% by 2025 and 5.5% by 2030.

New energy vehicle (NEV) regulations stipulate the number of NEV credits each OEM must generateannuallyand are expressed as a percentage of total passenger car sales.The target for 2020 is 12% NEV credits, rising to 18% in 2023. The regulationtherebyincentivisesthe sale of vehicles with greater fuel efficiency,asthey generate more NEV credits.

The NEV creditschemeis scheduled to expire in 2023, leaving China without any specific ZEV policies. However, China’sNew Energy Automobile Industry Plan(2021-2035) sets a target for 20% ofvehiclesalesto beNEVs by 2025,and the China SocietyofAutomotiveEngineers targetsover 50% NEV sales by 2035.

Higher fuel prices are correlated with lower fuel consumption. European countriesas well asJapan and Korea,where high fuel taxes are levied,have the world’s lowestfuel consumptionper vehicle km.

In comparison,low fuel taxesin Canada, Australia and the UnitedStatescorrespond withabove-averagefuel consumption.Higherfuel taxescould thereforeencourage the uptake of fuel-efficient vehiclesin these countriesandsupportalignmentwith the NetZeroEmissionsby 2050Scenario.Importantly,to ensure that fuel taxes are not a form of regressive taxation, targeted measurescould be devised tooffset impacts on disproportionately affected segments.Furthermore,all governmentsmustmove towards eliminating fossil fuel subsidies.

There is a direct correlation between a country’s long-term fuel prices and the average fuel economy of the vehicles its citizens purchase. Morocco is one country that has successfully phased out road fuel subsidies in recent years, while others such as India, Mexico and Indonesia have been working on lifting them.

Globally, direct subsidies for road transport fuels are still in place in at least 38 countries, mostly developing ones. As these subsidies disincentivise the designing and marketing of efficient vehicle equipment, countries should reduce or remove them to reach the SDS goals by promoting the uptake of technologies that improve average fuel economy.

One of the most widespread regulatory instruments to incentivise rapid adoption of efficient technologies areCAFEstandards.Although CAFE standards did not successfully drive down fuel consumption in the EuropeanUnionbetween 2017 and 2019,once the newEU2020 targetcame into force, average CO2emissions dropped12% within a single year (the same amountachieved between 2010 and 2019).

Additionally,“feebate” schemes, such asFrance’sbonus-malus policyintroduced in 2008,impose a fee onthe purchase ofvehiclesfor whichrated specific CO2emissions (gCO2/km)exceedapredetermined level, and subsidisethe purchase of vehicles with CO2emissions below a specified level. Althoughfeebatesdirectly target CO2emissions performance,theyindirectlyaffect vehicle weight and size, as larger, heavier vehicles tend to be less fuel-efficient.

New ZealandrecentlyintroducedaClean Car Discountthatprovides purchase rebates for eligible new and used electric LDVs.Italso plans toimplement aClean Car Standard,which will impose a fee on imported vehicles above a specified CO2emissions rating and provide a credit for vehicles below the rating.

To ensure fuel economy and CO₂emissions standards are effective,governments must continueregulatory efforts to monitor andreducethe gap between real-world fuel economy and rated performance.Encouragingly,newEUregulationswill require on-board fuel consumption meters for all new cars from2021 onwards.

The Global Fuel Economy Initiative (GFEI), was founded in 2009 to promote and support government action to improve energy efficiency oftheglobal light-duty vehicle fleet.The initiative draws on the expertise ofsix partners,andpursues three core activities:

• Providing data and research analysis of fuel economy potential by country and region
• Supporting national and regional policy makers
• Raisingawareness among stakeholders (e.g.vehicle manufacturers) through outreach and campaigns

In 2019,the GFEIreaffirmed their targetof doubling the fuel economy of new passenger vehicles globally by 2030 (relative to 2005), and extended this targetto a 50% reduction in new passenger vehicle per-kilometre CO₂emissions by 2030(relative to 2005).Given slow progressin fuel economy improvements to date, the global average fuel consumption of new light-duty vehicles needs to decrease 4.3% per year from 2019 to 2030to achieve the GFEI’s 2030 target.