Greenhouse Gas Emissions Performance for the 2011 to 2014 Model Year Light-Duty Vehicle Fleet

(In relation to the Passenger Automobile and Light Truck Greenhouse Gas Emission Regulations under the
Canadian Environmental Protection Act, 1999)

Transportation Division
September 2016

(PDF 821 kB)

Table of contents

• Purpose
• The Regulations
• Greenhouse Gas Emissions Performance for the 2011-2014 Model Years
• CO₂ Emission Credit System
• Conclusions

List of tables

• Table 1: Model Year Report Submission Status

List of figures

• Figure 1. Vehicle footprint
• Figure 2. 2011-2025 Targets for Passenger Automobiles
• Figure 3. 2011-2025 Targets for Light Trucks
• Figure 4. Average GHG Emissions Performance - Passenger Automobiles
• Figure 5. Average GHG Emissions Performance - Light Trucks

Purpose

The purpose of this report is to summarize the overall fleet average greenhouse gas emission performance of the Canadian fleets of passenger automobiles (PA) and light trucks (LT) for the 2011-2014 model years based on data submitted by companies in their end-of-model-year reports pursuant to the Passenger Automobile and Light Truck Greenhouse Emission Regulations.

The Regulations

In October 2010, the Government of Canada published the Passenger Automobile and Light Truck Greenhouse Emission Regulations^Footnote1 (Regulations) under the Canadian Environmental Protection Act, 1999 (CEPA 1999). This was the Government of Canada’s first ever GHG regulation and was a major milestone for Environment and Climate Change Canada’s transportation regulatory work.

The Regulations establish progressively more stringent GHG emission standards for new light-duty vehicles of model years 2011-2025, in alignment with the U.S. national standards. The applicable standards for a given model year are based on prescribed CO₂ equivalent emission “target values” that are a function of the “footprint” (Figure 1) and quantity of the vehicle models in each company’s fleet of passenger automobiles and light trucks. These standards are performance-based which allow companies to choose the most cost-effective technologies to achieve compliance.

Figure 1. Vehicle footprint

The Regulations prescribe decreasing target values for a given footprint size over the 2011 through 2025 model years. Figures 2 and figure3 illustrate the target values for passenger automobiles and light trucks for the 2011 - 2025 model years which become increasingly more stringent with each successive model year. The 2011 target values, introduced one year prior to the U.S. Environmental Protection Agency (EPA) program, are based on the U.S. Corporate Average Fuel Economy levels. Accordingly, the Regulations considered the consumption of fuel as the basis to establish reasonable approximations of GHG performance for the 2011 model year. For the 2012 and later model years, the target values are aligned with the U.S. EPA target values.

Figure 2. 2011-2025 Targets for Passenger Automobiles

Figure 3. 2011-2025 Targets for Light Trucks

The overall passenger automobile and light truck fleet average standard that a company must meet is ultimately determined by calculating the sales weighted average with the following formula:

Where

A is the CO₂ emission target value for each group of passenger automobiles or light trucks having the same emission target;

B is the number of passenger automobiles or light trucks in the group in question; and

C is the total number of passenger automobiles or light trucks in the fleet.

The Regulations also incorporate certain compliance flexibilities to enable companies to achieve the applicable GHG standards while incentivizing the deployment of new emission reduction technologies. Some of these flexibilities include allowances for making GHG-reducing improvements to vehicle air conditioning systems as well as for innovative technologies for which the emission reduction impacts are not easily measured during standard emissions tests. The Regulations also recognize the GHG reduction potential for vehicles capable of operating on oxygenated fuels (e.g. ethanol). Additional flexibilities include incentives for advanced technology vehicles (e.g. electric vehicles, plug-in hybrid vehicles or fuel cell vehicles). There are also temporary optional standards available for intermediate volume companies and provisions for low volume companies (i.e. less than 750 vehicle per year) to elect to exempt themselves from GHG compliance for the 2012 and later model years.

Under the Regulations, companies are required to submit an annual end of model year report that is used to demonstrate compliance to its applicable standard for both its passenger automobile and for its light truck fleets. Companies with a fleet average below the standard accrue emission credits that can be used to offset an emissions deficit, or traded. Companies with a fleet average exceeding the standards accrue an emissions deficit that must be offset within three years.

In order to recognize early action and good performance during the preceding years, the Regulations enabled companies to earn “early action” credits for their 2008-2010 model year vehicles. This provision required that companies provide a full report on their 2008-2010 model years, and that the net credit balance be positive. Given that not all companies elected to avail themselves of this option, the performance for the early action years is not discussed in this report.

Greenhouse Gas Emissions Performance for the 2011-2014 Model Years

For the purposes of this report, the results are being presented at the fleet level based on data from the companies that submitted reports pursuant to the Regulations during 2011-2014 model years as listed in table 1.

Because each manufacturer’s fleet is unique, the data presented in the graphs are based on the aggregated standard values for all companies, and are intended to depict the average results. The graphs below (Figures 4 and figure5) illustrate the year over year performance for both passenger automobile and for light truck fleets. These trend lines depict the average standard applicable to the overall fleet (dotted line) and the compliance value (solid line) for each fleet. The “compliance value” is the final average CO₂ equivalent value that is compared to the standard after all available compliance flexibilities have been factored in according to the following equation:

Fleet Avg CO₂ equivalent value = Avg tailpipe GHG emissions – total fleet allowances

Results to date indicate that the overall fleet average CO₂ equivalent (i.e. compliance value) for both passenger automobiles and for light trucks has been decreasing year over year and continues to decrease.

As depicted in Figure 4, as the stringency of the Regulations has increased, the passenger automobile fleet has continued to comply with the applicable standard. From 2011 to 2014 the average compliance values from passenger automobiles have decreased from 255 to 234 grams per mile, a reduction of 8.2 percent.

Figure 4. Average GHG Emissions Performance - Passenger Automobiles^{Footnote 2, Footnote 3}

The Canadian light truck fleet has also remained in compliance with the Regulations (Figure 5). From 2011 to 2014 the average compliance values from light trucks decreased from 349 to 322 grams per mile, a reduction of 7.8 percent.

Figure 5. Average GHG Emissions Performance - Light Trucks^{Footnote 2, Footnote 3}

CO₂ Emission Credit system

The Regulations include a system of emission credits to help meet overall environmental objectives in a manner that provides the regulated industry with compliance flexibility.

A company must calculate emission credits and deficits in units of megagrams (Mg) of CO₂ equivalent for each of its passenger automobile and light truck fleets of a given model year. Using the provided mathematical formula, if the result of the calculation is positive, the company will generate credits for that model year. If the result of the calculation is negative, the company will incur a deficit. Effectively, credits are obtained by companies whose fleet emission levels fall below the company’s fleet average GHG emission standard, while deficits are incurred by companies whose fleet emissions exceed the applicable standard.

The total credit balance is determined according to the following formula:

Where

A is the fleet average CO₂e value for passenger automobiles or light trucks;

B is the fleet average standard forpassenger automobiles or light trucks;

C is the total number of passenger automobiles or light trucks in the fleet; and

D is the is the total assumed mileage of the vehicles in question, namely,

• 195,264 miles for a fleet of passenger automobiles, or
• 225,865 miles for a fleet of light trucks.

The ability to earn and bank credits, including early credits, is an important aspect of the Regulations and is intended to give manufacturers flexibility to meet the 2012-2016 model year standards, as well as assist with the transition to the progressively more stringent standards in the 2017-2025 model years. The credits represent the emission reductions that manufacturers have achieved in excess of those required by the Regulations. The ability to accumulate credits allows manufacturers to plan and implement an orderly phase-in of emissions control technology. For the period covered in this report, companies have generated credits that can be used to offset a deficit up to the 2021 model year. Emission credits that can be used to offset a deficit incurred in the 2022 and later model years can only be generated beginning in the 2017 and later model years.

Conclusions

Results for the 2011 to 2014 model years indicate fleet average GHG compliance values are at or below the average standard for each year and have been decreasing, from 255 to 234 grams per mile for passenger automobiles and from 349 to 322 grams per mile for light trucks over this period. This represents reductions of 8.2 percent and 7.8 percent, respectively.

To date, companies have generated approximately 67 million emissions credits of which approximately 3% have been used to offset a deficit, and 48% have expired by the end of the 2014 model year. 32.9 million credits remain available for future use  through the 2021 model year.