A Review and Evaluation of Vehicle Fuel Efficiency Labeling and Consumer Information Schemes Anup Bandivadekar Zifei Yang March 24, 2015 APEC VFEL workshop.

A Review and Evaluation of Vehicle Fuel Efficiency Labeling and Consumer Information Schemes

Anup Bandivadekar

Zifei Yang

March 24, 2015

APEC VFEL workshop

Singapore

ICCT mission and activities

The mission of ICCT is to dramatically improve the environmental performance and efficiency of cars, trucks, buses and transportation systems in order to protect and improve public health, the environment, and quality of life.

Non-profit research organization

Air Pollution and Climate Impacts

Focus on regulatory policies and fiscal incentives

Activity across modes including aviation and marine

Global outreach, with special focus on largest markets

Slide 2

3

Outline

Background and motivation Project scope and methodology Review of VFEL Programs Six key elements of VFEL program Survey results Major findings Further discussion

4

1 Background and motivation

5

Vehicles make up more than 20% of greenhouse gas emissions …

6

… and emission levels will increase without reduction efforts

7

APEC economies account for ~40% of population, ~56% of GDP, and 66% of global vehicles sales

8

Robust vehicle sales growth in APEC economies

9

Integrated Vehicle Efficiency Policy PortfolioTo

day’

s pr

esen

tatio

npolicy measures to increase vehicle efficiency

10

2 Project Scope and methodology

11

Vehicle fuel efficiency labeling (VFEL) schemes encourage consumers to purchase more efficient vehicles

• The “fuel efficiency label” referring information that is displayed about the car in the showroom, online or through other media

• Associated consumer information campaign• Monitoring uptake of the scheme by industry • Monitoring consideration of fuel economy by

customers

VFEL schemes include

• Passenger cars, light trucks/light-commercial vehicle• All types of fuel (gasoline, diesel, LPG, CNG,

hydrogen, electricity)

VFEL schemes applicable to

12

How well are the VFEL schemes working and what could be improved?

Desk-research on VFEL literature and regulations

• Identified experts in APEC and non-APEC economies working on vehicle fuel efficiency labeling field

• Respondents come from government, research institution, auto clubs, consumer association, other non-profits

Stakeholder survey

Workshop discussion

13

Survey overview

Conducted online via Sogosurvey from 21st December 2014 to 28th Feb 2015

34 complete responses

17 APEC economies +

5 non-APEC economies + EU

14

Participants from 17 APEC economies and 6 non-APEC Economies responded to the survey

APEC economies with VFEL

Survey APEC economies without VFEL

Survey APEC economies with VFEL

Survey

Australia √ Brunei Darussalam Austria √

Canada √ Indonesia Brazil √

Chile √ Malaysia √ Germany √

China √ Mexico √ The Netherlands √

Hong Kong, China √ Papua New Guinea The United Kingdom √

Japan √ Peru The European Union √

Republic of Korea √ The Philippines √

New Zealand √ Russia √

Singapore √ Thailand √

US √

Viet Nam √

Chinese Taipei √

15

Survey Respondents’ affiliationsAustralia Department of Infrastructure and Regional Development

Canada Natural Resources Canada

China China Automotive Technology and Research Center

Chile Vehicle Control Center and Certification; Ministry of Energy

Korea Korea Energy Management Corporation

Malaysia Malaysia automotive institute, Universiti Tenaga Nasional

Mexico National Commission for the Efficient Use of Energy

New Zealand Energy Efficiency and Conservation Authority

Russia Ministry of Transport (NIIAT)

Singapore Land Transport Authority

Thailand Department of Alternative Energy Development and Efficiency, Asia Pacific Energy Research Center

The Philippines Clean Air Asia

US Environmental Protection Agency; Department of Energy; Oak Ridge National Laboratory

Vietnam Vietnam Register- Ministry of Transport

EU EU commission, EU Consumer Organization (BEUC)

Austria Austria Tech

Brazil National Institute of Metrology, Standardization, and Industrial Quality (INMETRO), Greenpeace Brazil, Instituto de Energia e Meio Ambiente

Germany Consumer Federation (VZBV)

UK Department for Transport, Low Carbon Vehicle Partnership

The Netherlands Netherlands Ministry for infrastructure and Environment

16

3 Review of VFEL Programs

17

Six key elements for VFEL programs

Regulatory framework

Program design

Label information and design

Consumer outreach

Compliance and enforcement

Performance measurement

18

Components under six key elements (1-3)

• Legislative/regulatory support• Other fuel efficiency related policies

Regulatory framework

• Mandatory VFEL requirement• Broad coverage of the VFEL scheme• Public participation in program design• Accurate fuel efficiency/CO2 emissions data that reflect

vehicle real-world performance

Program design

• Understandable fuel efficiency/CO2 emissions information• Indication of running cost or financial penalties/reward• Comparable information for AFVs• Specialized information for advanced technologies

Label information and design

19

Components under six key elements (4-6)

• User-friendly website provide VFEL information• Mandatory fuel efficiency information in promotion

materials through other media• Direct communication channel with consumers

Consumer outreach

• Audits of vehicle fuel efficiency/CO2 emissions test• Verification of the display and correctness of label

information and impose penalty for non-compliance

Compliance and enforcement

• Periodical VFEL effectiveness assessmentPerformance measurement

20

Six key elements for VFEL programs

Regulatory framework

Program design

Label information and design

Consumer outreach

Compliance and enforcement

Performance measurement

21

Year of implementation VFEL programs in APEC and select Non-APEC economies

22

VFEL program objectives ranked by importance

23

Implementation of fuel efficiency related policies by economy

24

Importance of complementary fuel efficiency policies in enhancing VFEL program

25

Economies using a combination of different policies are more likely have a larger CO2 emission reduction

26

Six key elements for VFEL programs

Regulatory framework

Program design

Label information and design

Consumer outreach

Compliance and enforcement

Performance measurement

27

VFEL program scope

• US, UK• Canada, Hong Kong China, New Zealand (AFVs), Brazil

• New Zealand

• Australia, Chile, China, Chinese Taipei, Japan, Korea, New Zealand, Singapore, US, Vietnam, Austria, Germany, the Netherlands, UK

Mandatory New

Mandatory Used

Voluntary Used

Voluntary New

Economies in red apply VFEL program to passenger cars only,Others apply to passenger cars and light truck/light-commercial vehicles

28

Test cycles adopted by different economies for fuel efficiency/CO2 emission label information

Test Cycle Adopted By

NEDC/UN ECE 101 Australia, Chile, China, Chinese Taipei, Singapore, Viet Nam, Austria, Germany, Netherlands, UK

US 2-cycle Korea, Brazil

US 5-cycle USA, Canada

JC08 Japan

Japan 10-15 mode Hong Kong, China

Note: New Zealand accepts vehicles built to standards in US, EU, Japan and Australia.

With adoption of WLTP, a greater harmonization is likely to take place.

29

Six key elements for VFEL programs

Regulatory framework

Program design

Label information and design

Consumer outreach

Compliance and enforcement

Performance measurement

30

Frequency of usage of information on different labels in 17 VFEL programs

Fuel efficiency info.

CO2 emission info.

Others

31

Important label information elements

32

Different scales for showing fuel efficiency ratings

33

2015 Toyota Camry Label Rating

Economies Rating range Toyota Camry Rating

Canada CO2 (1-10) 1 2 3 4 5 6 7 8 9 10 (best)

Chinese Taipei

Efficiency relative class rating (1-6) (best) 1 2 3 4 5Class: 2400~3000 cc

Korea Fuel efficiency (1-5) (best) 1 2 3 4 5

US CO2/efficiency (1-10) 1 2 3 4 5 6 7 8 9 10 (best)

Brazil Fuel efficiency relative class rating (A to E)

(best) A B C D E (relative class)(best) A B C D E (absolute)

Germany CO2 relative class rating (A+ to G) (best) A+ A B C D E F G

UK CO2 (A to M) (best) A B C D E F G H I J K L M

2015 Toyota Camry 2.5 L 134 g/km (NEDC) 17.8 km/l (US 2-cycle) 28 mpg (US 5-cycle)

34

Rating of the usefulness of label information for AFVs

Special considerations for AFVs

Fuel efficiency/consumption equivalent (MPGe?)

CO2 emissions Inclusion of upstream emissions?

Refueling cost Financial information

Added incentives for AFVs

Others Electricity consumption, range,

charge time, operation information of AFVs

35

Six key elements for VFEL programs

Regulatory framework

Program design

Label information and design

Consumer outreach

Compliance and enforcement

Performance measurement

36

Elements of a VFEL website

Fuel efficiency/VFEL program introduction; Explanation of label elements; Fuel Efficiency information by make, model, type; Comparison among different models; Fuel cost calculation; Fiscal incentive information; Real world fuel consumption report Eco-driving suggestions

37

38

Rating on marketing initiatives to VFEL scheme

39

Six key elements for VFEL programs

Regulatory framework

Program design

Label information and design

Consumer outreach

Compliance and enforcement

Performance measurement

40

Compliance and Enforcement of VFEL

Ensuring that the reported fuel efficiency data complies with the standard test procedures

Ensuring that accurate information is provided to the consumers in a conscientious manner

41

Six key elements for VFEL programs

Regulatory framework

Program design

Label information and design

Consumer outreach

Compliance and enforcement

Performance measurement

42

Measuring overall effectiveness of VFEL programs

• Measuring the level of compliance; identifying means to enhance compliance

• Understanding the consumer awareness and influence of the program in the real world.

• Does the VFEL program alter the consumers purchasing behavior?

• Learning lessons from the success and challenges of existing program

• Identifying potential changes that will help the improve VFEL program overall

43

Effectiveness Measurement

44

How has the assessment been conducted?

Other Mystery shopper Studies of grade consumption evolution Studies identify fuel saving attributed to VFEL and assess efficiency improvement

driven by consumers and government requirement Interview with national and European level stakeholders (in the EU)

45

Which indicators would you use to assess the effectiveness of a VFEL program?

Other Participation of vehicle manufacturers, importers and sales agents (in voluntary program) Advertising for marketing and sales, TV and radio announcements (in voluntary program) Counts of media stories mentioning fueleconomy.gov (in the US)

46

Initiatives improving VFEL program effectiveness

47

Barriers in effectiveness assessment

• Difficult to distinguish the effect of fuel economy labeling from other factors that might influence consumers and the market

• Difficulty in setting up a control group

• Changes in consumer preferences

48

Preliminary Assessment of APEC VFEL Programs

Participant feedback and scrutiny needed to before finalization

49

4 Draft Best Practices

50

Best practices for VFEL Programs <DRAFT>

• Legislation and labeling specific regulation to empower agencies to establish and enforce the scheme

• Implement complementary policies: FE standards, fiscal incentives etc.

Regulatory framework

• Mandatory rather than voluntary• All fuel types covered• Include new as well as used vehicles• Conduct comprehensive market research

Program design

• Show running cost and financial penalties/reward• Present comparable information for AFVs:

efficiency/CO2 data, refueling cost, financial information

• ? Absolute value/absolute class rating/relative class rating

• ? Metrics

Label information and design

51

Best practices for VFEL Programs <DRAFT>

• Maximize the features of VFEL website• Make label information available through other media,

especially the internet• Open two-way communication channel with consumers

Consumer outreach

• Carry out confirmatory tests• Conduct periodic verification of the display of label

information• Impose penalty for noncompliance

Compliance and enforcement

• Conduct regular program assessments• Track compliance level of the VFEL schemes• Survey impact of efficiency and labels on consumer

behavior

Performance measurement

52

Next Steps

Comments on interim report due April 17th, 2015 Workshop summary: May 11, 2015 Address any identified gaps in the analysis, from

the workshop: May 18, 2015 Draft final project report, a draft best practice

guide, and a draft recommendations action plan to APEC: August 10, 2015

Maintain network with practitioners Final project documents by October 13th, 2015