Fuel Economy in Macedonia Transfer of know-how Stabilizing greenhouse gas emissions from road transport trough doubling of global vehicle fuel economy: regional implementation of the Global Fuel Economy Initiative – GFEI Fuel Economy in Macedonia Transfer of know-how 18-19 May 2016 Hotel “Romantik” Veles Alex Körner alex_koerner@gmx.de

Content Overview of selected results from the IEA study “Technology and policy drivers of the fuel economy of new light-duty vehicles” Case study: Turkey & South Africa Summary and recommendations

FE improvement - Targets and reality OECD: rates close to target Non-OECD: little improvement Global: Right trend at slow pace 2030: Improve global FE by 50% Regions with strong FE policies saw encouraging FE improvement over the last decade

Average new LDV fuel economy normalized to new WLTC Target: investigating the technology and policy drivers behind heterogeneous FE distributionc

Correlation 1: vehicle segment vs. FE In general, a clear correlation between vehicle segment and FE can be observed Especially in developing markets a trend towards larger vehicles can impede FE improvement Countries with high vehicle and fuel taxes tend to have on average smaller cars

Correlation 2: powertrain technologies vs. FE A clear correlation between dieselization/hybridisation and FE can be observed Countries with stringent FE or CO2 emission standards tend to show better average FE

FE development pattern Markets with strong FE policies see limited growth in vehicle weight and size but strong FE improvements The opposite is true for developing markets with insufficient FE policies

Case study: Turkey Fuel taxation can be a strong measure – although Turkey has no other efficient FE policies the simple fact of having the fourth highest fuel prices in the world (at moderate GDP per capita levels) lead to a impressive FE improvement over time

Case study: South Africa After the introduction of differentiated vehicle taxation in 2010, specific CO2 emissions dropped by 10% until 2013 At the same time, the trend towards heavier vehicles got stopped

Effectiveness of FE policies Fuel economy/CO2 emission standards force efficient vehicle technologies into the market Vehicle taxation/feebate schemes guide consumers towards smaller and more efficient cars Fuel taxation dampens the potential rebound effect (more driving) resulting from more efficient cars

Summary & Recommendations The combined adoption of regulatory instruments, such as fuel economy standards, and fiscal incentives led to the highest energy savings from LDVs. Fuel economy standards guaranteed effective improvements of fuel economy. Stringent targets led to the prioritisation of fuel economy improvements over other vehicle characteristics by manufacturers and consumers. Differentiated vehicle taxation was effective even when not coupled with fuel economy standards, especially in markets with lower purchasing power. Differentiated vehicle taxation is also generally easier to set up than fuel economy regulations: it should be prioritised, especially in developing regions.

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