Reducing Fuel Consumption in the World’s Largest Auto Market
In 1985, China produced about 450,000 new vehicles per year. By 2013 that figure had topped 22 million—a nearly 48-fold jump. China raced past the United States in 2009 to become the largest new car market in the world.
It became clear in the early 2000s that automobile use in China was growing rapidly and the country still had no regulatory standards for vehicle efficiency. Failing to act would have sparked a spike in oil imports, rising economic costs, and weaker energy security for China.
The China Transportation Program (CTP) launched efforts to reduce vehicle fuel consumption with a focus on fuel economy standards for passenger cars, which occupy over 70 percent of total sales and consume most of China’s gasoline.
The program aligned with vehicle industry authorities and built a partnership with the China Automotive Technology & Research Center (CATARC), the country’s chief technical support organization for policymakers in auto industry matters. It brought international experts to China to introduce best practices in fuel economy policy and organized study tours to other countries. In 2001, CTP helped to create the China Steering Committee for Studies on Passenger Car Fuel Economy, which for the first time brought together all major government bodies with jurisdictions relevant to fuel economy policy.
CTP supported studies by CATARC, Tsinghua University, and the Development Research Center of the State Council—grantees carefully selected to maximize traction with policymakers. It also brought in technical support from such leading international experts as Michael Walsh, An Feng, and Michael Wang. In 2004, the National Development and Reform Commission (NDRC) released the Passenger Vehicle Fuel Consumption Limits national standard. By 2011, the first two phases of this standard had saved about 15 million tons of gasoline, exceeding 20 percent of China's annual gasoline consumption in 2010.
But the standard had shortcomings. It addressed the fuel consumption of single vehicles, not the fuel consumption of the vehicle fleet as a whole, which was actually increasing. China had also started importing large quantities of cars that were high-emission and fuel-inefficient, and they weren’t covered by the standards.
CTP went to work with CATARC, which proposed to the Ministry of Industry and Information Technology (authority over fuel economy was transferred from NDRC to MIIT in 2008) that China adopt a new Corporate Average Fuel Consumption (CAFC) system that evaluated fleet-wide fuel efficiency. Drafted by CATARC with technical support from the International Council on Clean Transportation and other organizations, CAFC was released by MIIT in 2012 as the phase III fuel economy standard, which could curtail 80 million tons of carbon dioxide emission per year by 2030.
CTP is now pushing ahead on a phase IV standard. Consultation and technical review stages are complete and it will soon enter China’s process for approval of standards. In the meantime, CTP is also promoting a penalty regime and supporting technical research on a fifth phase of the standard.
In December 2013, drawing on work by grantee CATARC, MIIT released the Fuel Consumption Limits for Heavy-duty Commercial Vehicles. By 2015 this will cut the average fuel consumption of diesel vehicles by 11 percent from a 2012 baseline, equivalent to reducing diesel consumption by 6 million tons annually. China now has a complete fuel economy standard system covering major vehicle types.
"Vehicle fuel economy standards are some of the most effective measures for controlling the increase in oil consumption. The development and delivery of a host of fuel economy standards and supporting policies for passenger cars, light-duty commercial vehicles, heavy-duty commercial vehicles, agricultural vehicles and motorcycles have constructively reduced oil consumption in China's transportation industry. Energy Foundation China has played an active role and made a great difference during the formulation of these standards."
Zhang Xiangmu, Director-general of MIIT’s Equipment Industry Department