Germany's G20 leadership could expand international cooperation on vehicle efficiency

Posted Wednesday, 17 May 2017, 19:57

Drew Kodjak and Josh Miller

Since Germany began its G20 presidency last December, the German leadership has made it clear that the energy sector is a top priority for 2017. The new Sustainability Working Group (SWG) has convened three times—in December, March, and May. The activities of the SWG are expected to result in an Action Plan on Climate and Energy for Growth, to be presented for consideration at the next G20 Summit in Hamburg on July 7–8.

There is in fact substantial agreement in the G20 on enhancing the efficiency and environmental performance of the energy sector to promote sustainable economic growth. Last year the G20, under China's presidency, adopted the Energy Efficiency Leading Programme (EELP), a long-term plan for energy efficiency that covers transport, buildings, industry, electricity generation, networked devices, and finance. For transport, the EELP establishes a definition of "world-class" policies: these include the equivalent of Euro VI or U.S. 2010 emissions standards for heavy-duty vehicles; Euro 6 or U.S. Tier 2/3 for light-duty vehicles; a 50% reduction in LDV fuel consumption compared to a 2005 base year by 2030; and a 30% reduction in HDV fuel consumption compared to a 2010 base year by 2030. The definition of "world-class" policies is important because it sets a clear benchmark for G20 countries to work toward, and this benchmark is linked to actionable policies. These definitions were informed by the ICCT's report to the Transport Task Group, a working group of G20 countries that voluntarily collaborate to improve the energy efficiency and environmental performance of motor vehicles.

Our transport sector analysis of the EELP shows that achieving the targets for world-class standards among selected G20 countries would result in tremendous benefits for energy efficiency and public health. As the chart below shows, already-adopted energy efficiency standards for light- and heavy-duty vehicles are expected to save the equivalent of 15 million barrels of oil per day in 2040, with hundreds of billions of dollars per year in savings for consumers and freight operators at the pump. And the adoption of world-class energy efficiency standards applied in all TTG members could save an additional 16 million barrels of oil per day in 2040, and hundreds of billions of dollars more per year. The combined annual energy savings from adopted and potential policies are equivalent to a third of today's global oil production. Additionally, the adoption and implementation of world-class emissions standards in selected G20 countries—China, India, Mexico, Brazil, Russia and Australia—would result in a 74% reduction of highly toxic fine particle emissions by 2030.

Figure 1
Historical and projected energy consumption for Australia, Brazil, Canada, China, the EU-28 (including TTG members Germany, Italy, and the United Kingdom), India, Japan, Mexico, the United States, and Russia. Efficiency standards are capable of stabilizing road transport energy consumption at 2010 levels. [Source]

At the G20 Summit in Hamburg, Germany can lay the groundwork to achieve these energy savings and environmental benefits in three important ways. First, Germany's Action Plan on Climate and Energy for Growth could call upon G20 countries to pledge to adopt world-class standards for light- and heavy-duty vehicles as identified in the EELP. These actions follow the rationale of energy efficiency as a first fuel, since energy savings fully pay back the investments in better technology. Second, the action plan could designate the TTG as the working group responsible for facilitating knowledge transfer among G20 governments and supporting the development of best practice policies and effective compliance procedures. Initial actions should focus on heavy-duty vehicles and their multiple benefits, namely cleaning up diesel fuels and vehicles to improve public health and improving vehicle efficiency through energy efficiency standards and green freight programs. Lastly, considering Germany is the fourth largest market for electric vehicles (after China, the United States and Japan) and a leader in integrating renewables into its electricity grid, Germany is well-positioned to invite G20 leaders to commit to develop policies and incentives that promote electric vehicles powered by reliable renewable electricity.

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