China introduced new CAFE-like requirements

The draft version of the Measures for the Management of Corporate Average Fuel Consumption（hereinafter referred as Measures）has been completed by the Chinese government and will be released to seek public opinions.

The Measures will establish a completed credits-based system to speed up the elimination of high-pollution cars and the development of clean cars.

According to the Measures, the credits for a carmaker equal to the company’s average fuel consumption minus the standard fuel consumption specified in the Measures, and then multiply the result by a rate, also specified in the Measures. Besides, this system also allows carmakers to carry their credits forward for the next model year and trade credits with each other.

The Measures is believed to change the structure of Chinese carmakers’ product lines, to speed up automobiles industry’s reorganization and to bring more opportunities for companies that concerned about energy conservation and emission reduction.

It’s also believed that the credit trade system introduced in the Measures will bring huge profits for carmakers that hold more credits and therefore encourage the development of alternative energy vehicles, said Quanshi Chen, a professor at Tsinghua University.

To be noted, China’s new Measures shares many similarities with the Corporate Average Fuel Economy requirement, as known as CAFE, applied in USA.