CO2 and energy efficiency car standards in the EU in the context of a decarbonisation strategy: A model-based policy assessment

The European Union introduced CO2 emission standards on cars as an obligation to manufacturers to reduce carbon footprint of cars in EU transportation. The car industry is already marketing low carbon emitting technologies to adjust to the 95 gCO2/km target set for 2020. An alternative policy option is setting energy efficiency standards, measured as energy consumption per kilometre. A policy based on a long-term commitment on continuously decreasing standards and the choice of the focus between CO2 or energy efficiency will strongly influence car technology choice. The aim of this paper is to assess these candidate policies for the EU in terms of effectiveness, costs and emission implications until 2050 on the basis of scenarios quantified using the PRIMES-TREMOVE energy economic transport model. The scenarios assume various configurations of the standards and the assessment draws on comparisons to a Reference scenario which does not strengthen standards after 2025. The analysis shows that restructuring the EU car fleet towards significant reductions of energy consumption and CO2 emissions is affordable provided that preconditions are met regarding technology progress and development of refuelling/recharging infrastructure. CO2 standards allow a diversified use of technologies, while efficiency standards are more “risky” favouring a single technology.