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CAFE regulations
World history
The Corporate Average Fuel Economy, otherwise known as the CAFE standard or CAFE regulation, is a regulation that was introduced in the United States to combat the greenhouse effect. Introduced in the wake of the first oil crisis in 1973, the CAFE regulations were designed to influence the development of American vehicles and energy dependency, with a joint programme for manufacturers to gradually reduce average fuel consumption. In 1975, new cars in the United States consumed 15 litres of petrol per 100 km.
Key dates
CAFE (Corporate Average Fuel Economy) regulations were established in 1975 by the US government. through the Energy Policy and Conservation Act (EPCA). to increase the energy efficiency of motor vehicles. Initially, it applied to a single category of car: passenger cars. Two years later, the standard was extended to vans and trucks. light commercial vehicles . TheThe key stages and important dates of this regulation include :
1975: CAFE regulations are established for the first time, requiring an average fuel efficiency of 18 miles per gallon (mpg) for cars produced from model year (MY) 1978 onwards.
1985: CAFE requirements are increased to 27.5 mpg for MY 1985 and subsequent cars.
2007: CAFE requirements are increased to 35 mpg for MY 2020 and subsequent cars.
2012: CAFE regulations are updated to include separate requirements for cars and light trucks, with targets for increasing fuel efficiency for each category of vehicle.
2020 : CAFE requirements are increased to an average of 51 mpg for cars and light trucks produced from MY 2020.
2022: CAFE regulations are updated to include greenhouse gas emission targets and align with EU and Chinese standards.
Implementation in Europe
In 2014, European leaders adopted the CAFE (Corporate Average Fuel Economy) regulation, which was due to take effect in 2020. These are onerous regulations for European carmakers, who have to comply with an average CO2 emission threshold that must not be exceeded. This is 95g CO2/km for Europe, compared with 125g CO2/km for the United States, 122g CO2/km for Japan and 122g CO2/km for China.
This text was passed in 2014, when 70% of sales were held by diesel vehicles in Europe. No one had anticipated the Dieselgate which is at the root of the considerable drop in the number of diesel cars. Since the Diesegate crisis, CO2 emissions have been trending upwards. The target is certainly an important one, but it should be noted that it was reached at 95% in 2020 and should reach 100% by the end of 2021. Manufacturers who did not reach the target in 2020 were fined a hefty sum! (more on this below).
The calculation of CO2 emissions for a manufacturer includes :
- CO2 emissions from petrol and diesel vehicles
- Electric vehicles (emit 0g of CO2/km).
- Double counting in the calculation
- As well as plug-in hybrids (emits 30 to 50 g of CO2/km).
- Will count for 1.67 in calculating the overall emissions rate of sales made
By increasing the share of electric and hybrid vehicles in the calculation, manufacturers will be rewarded for their production and sales of clean vehicles.
In 2020, new electric vehicle registrations tripled from 1.91TP3Q 2019. Electric vehicles are set to become a must with, in particular, the Lom law (thermal end in 2040), the WLTP standard and CAFE regulations.
Visit 2020the sales of new electric and hybrid cars have been multiplied by 3 compared with 2019, reaching 21.5 % of total registrations.
According to the CCFA-Comité des Constructeurs Français d'Automobiles, electric vehicles are set to take off strongly in 2020, accounting for 6.7 % (110,912 cars) of new passenger car registrations, compared with 1.9 % in 2019.
CAFE regulations in relation to the WLTP standard
The NEDC (New European Driving Cycle) standard was also introduced in 1973, but was modified and updated in 2020 with the new WLTP (Worldwide Harmonized Light Vehicle Test Procedure) standard, which measures fuel consumption as well as CO2 and other pollutant emissions from vehicles. It replaces the old procedure, the NEDC, which is considered to be too far removed from vehicles' real CO2 emissions.
The WLTP standard has a dual purpose:
- Calculate a vehicle's fuel consumption and emissions in terms of CO2
- To authorise its arrival on the automotive market. The vehicle must pass the procedure to be approved.
The results are closer to real-life use on the road. If the vehicle does not meet the standards, it will not leave the factory and adaptations will have to be made.
This switch to the WLTP standard has resulted in an increase of 34% in CO2 emissions. The ecologic malus is therefore greater, which is problematic for drivers. What's more, the malus is getting tougher every year, and the WLTP standard should convince professionals and private individuals alike to switch to clean vehicles.
Consumers are also taxed if their vehicle emits too much CO2, so they have no incentive to buy a polluting vehicle. The CAFE regulations for manufacturers are completely in line with the WLTP standard for consumers. Both have an interest in moving towards less polluting vehicles.
The objectives of each manufacturer's CAFE regulations
The average CO2 emission threshold is 95g CO2/km. In the interests of fairness, not all manufacturers have the same emission thresholds. In fact, some manufacturers start from a higher starting point, offering a majority of heavy-duty vehicles that emit more CO2. The targets are therefore proportionate to manufacturers' ability to adapt. The PSA Group and Opel, which mainly sell small cars, will have a threshold of 92g of CO2/km, while BMW, with its larger vehicles, must reach 103g of CO2/km by 2020.
Penalties for manufacturers
The CAFE regulation fine
Remember that the average quota not to be exceeded is 95g of CO2/km for the CAFE regulations.
(The table above shows the quotas for each manufacturer). So, if they exceed the quota, manufacturers will have to pay a hefty fine. You have to pay 95€ for each gram of excess CO2 multiplied by the number of vehicles sold by the manufacturer in 2020. That's why manufacturers have set their sights on producing electric vehicles in 2020. Very quickly, manufacturers will be required to produce only electric vehicles.
The bad pupils of the CAFE regulation in 2020
The manufacturers penalised include 2 pools:
- Ford-Volvo
- they had to comply with 101 g of CO2/km
- by the end of 2020, they had achieved 103 g of CO2/km
- FCA (Fiat Chrysler)-Tesla-Honda
- they had to comply with 94 g of CO2/km
- by the end of 2020, they will have achieved 97 g of CO2/km
One pool was a pact between certain manufacturers. Those that emit too much CO2 could buy credits from brands that emit little CO2. (For example, Fiat Chrysler and Honda were able to buy credits from Tesla to reduce their CO2 emissions.)
As well as :
- The Daimler Group (mercedes - smart)
- they had to reach 102 g of CO2/km
- by the end of 2020, they will have achieved 105 g of CO2/km
- Volkswagen Group
- they had to comply with 97 g of CO2/km
- by the end of 2020, they will have achieved 101 g of CO2/km
According to initial calculations, manufacturers will have to pay a total of €500 million. (€95 per excess gram x number of vehicles sold in 2020)
Conclusion
Yet another regulation that gives carmakers a strong incentive to produce electric cars. Carmakers have understood this. By 2022, many of them have produced and sold green models. In the years to come, we're going to see a veritable energy transitionThe CAFE law imposes penalties on manufacturers, while the WLTP standard taxes consumers.
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