China plans to pass the US on fuel economy

Posted: 5 March 2004

Author: Curtis Runyan

China is planning to require vehicle manufacturers to make lighter, more efficient vehicles that will help curb the country's oil imports from the Middle East. The move might have important environmental consequences around the globe, as Curtis Runyan reports.

In the past few months Chinese officials have announced plans to impose stringent, new fuel-economy standards on cars and trucks produced in their country. The standards are expected to be tougher than those in the United States.

"It's a big deal when a developing country comes along and institutes regulations that go beyond those of a developed country like the United States," said Amanda Sauer, an economist at the World Resources Institute (WRI).

Curbing pollution

Fuel economy standards are not the only example of China's recent efforts to tighten up environmental regulations. In the past few years the country adopted tough pollution restrictions for vehicles. These standards are on par with European regulations from the 1990s, and officials plan to catch up with European standards by the end of the next decade. In addition, China recently phased out leaded gasoline in less than three years.

But transportation experts point out that China's decision to institute new environmental regulations is not necessarily driven by an overwhelming concern for the environment. "This is about national security - Chinese officials want to curb the country's growing dependence on oil imports from the Middle East," said Lee Schipper, director of research at WRI's EMBARQ center for sustainable transportation. Even China's pollution control regulations have been driven largely by the need to address urban health issues.

China has limited oil reserves and is counting on efficiency requirements to pre-empt future shortages. Right now the country imports about a third of the 2 million tons of oil it consumes each year. Transportation consultant Feng An estimates that the share of oil imports will grow to about 50 per cent by 2010.

Oil dependancy

Even with the planned efficiency standards, China's projected growth rate of cars and trucks will present serious environmental challenges, including increasingly congested cities and a rapid growth in greenhouse-gas emissions. While the new regulations will put China ahead of the United States, the country will have to keep upping its standards in order to address future foreign oil dependency, health issues, and environmental problems.

"The reality may be that China gets a big environmental boost - not from environmental legislation per se, but from policies addressing economic, health, and national security concerns," said Sauer, who recently co-authored an analysis of the world's largest auto companies' economic vulnerability in the face of regulations regarding global warming.

A number of Chinese cities are also moving ahead with projects to improve public transportation and to make cities more livable. "The Chinese are very concerned about the future of their cities, and they are taking steps to make them more livable," said Wendy Tao, coordinator of EMBARQ's Shanghai project. "We are working with Shanghai to develop a comprehensive information system for transportation planning and to bring on line a 'bus rapid transit' system - a low-cost bus system than can move as many people as expensive light-rail systems."

Greener cars

A number of transportation analysts project that China's automobile market will be the largest in the world by 2020, when it may eclipse the United States as the largest purchaser of cars. "If China's booming automobile market demands smaller and more efficient vehicles than those being produced in the United States, car makers will have no choice but to respond," said WRI Senior Economist Duncan Austin. "China's decision will have a spillover effect, influencing what types of cars are sold in other countries."

Many European and Japanese automakers already make a majority of vehicles that match or exceed the proposed standards, whereas many US autos - especially trucks and SUVs - would not meet the Chinese standards.

"China is running into less resistance on this than we did in the United States because the infrastructure for building huge numbers of less-efficient vehicles isn't already in place," said Schipper. "The auto fleet is relatively small right now - both in number of vehicles and their size - so to require cleaner technologies is less of a headache for corporations."

Curtis Runyan is the managing editor of WRI Features, an international news features service on environment and development issues. © WRI Features. Reproduced with kind permission.