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US fuel economy standards can be met cost-effectively & cheaper than projected - study

Wed 22 March 2017 | Back to news list

A new study by the International Council on Clean Transportation (ICCT), says that the Environmental Protection Agency overstated by as much as 40 percent how much car makers must spend to meet fuel efficiency standards and that the money consumers save on fuel would more than offset a higher purchase price.

The ICCT,  an independent, non-profit research NGO, also found that advanced conventional power trains could continue to dominate the market in the near term and that progressively stringent fuel economy standards (4-6% per year) can be achieved cost-effectively with available or anticipated technologies.

The ICCT analysis found that the cost of meeting the US 2025 regulations would be $886 per vehicle on average, compared to $1,378 in the EPA’s analysis. The difference is attributed to small improvements over time in the cost and efficiency of technologies produced by the  car makers and their suppliers.

The report finds that although consumers may pay more for the vehicle itself, they could expect to save two to three times that amount on fuel costs based on projected future fuel prices.

The ICCT analysis explores the technology implications of the shift to increased efficiency and lower CO2 emissions in 2025–2030. It presents three key findings:

  • Advanced conventional power trains could dominate in the near term. Emerging technologies are pushing back the efficiency frontier of the internal combustion vehicles. Technologies such as cylinder deactivation, high-compression Atkinson-cycle engines, lightweighting, and mild hybridization will allow internal combustion to dominate  car makers’ strategies to comply with adopted 2025 standards.
  • Previous estimates of the costs of compliance have been consistently overstated, and there is no evidence that that trend is about to change. Technology costs continue to fall. State-of-the-art engineering studies and technology developments reported by suppliers suggest that costs for lightweighting, direct injection, and cooled exhaust-gas recirculation will decline by hundreds of dollars, and electric vehicle costs will drop by thousands of dollars per vehicle by 2025. 
  • In terms of both technology potential and benefit-cost ratios, progress on LDV efficiency can continue at the same rate at least until to 2030. Standards that get progressively more stringent, at 4%–6% lower fuel use per mile annually from 2025 to 2030, can be achieved cost-effectively. Such standards would result in modest, gradual vehicle price increases through 2030, and with two to three times greater consumer fuel savings than costs. 


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