Energy Efficiency Policy Toolkit 2025

Transport

Introduction

Private cars and vans were responsible for more than 25% of global oil use and around 10% of energy-related CO2-emissions in 2023. Doubling global annual energy intensity improvement by 2030 would require the efficiency of cars to improve by 5% each year. An integrated policy approach combining regulation, information and incentives is the most effective way to achieve this goal.

Regulations such as fuel economy standards and heavy-duty vehicle standards encourage manufacturers to introduce more efficient vehicles, thereby significantly reducing greenhouse gas emissions. Countries with regulations and/or efficiency-based purchase incentives in place improve efficiency on average 60% faster than countries without such policies. 

Information tools such as vehicle labels help inform consumers of a vehicle’s fuel economy and running cost savings. Labels can illustrate the benefits of choosing more efficient vehicles, while also increasing transparency about real-world fuel use. Another information tool is to promote fuel-efficient driving through training programmes.

Incentives such as electric vehicle subsidies can drive the market towards more efficient and less polluting vehicles. Government support for EV purchases can be transitional and evolve with the development of the technology and markets. As the technology matures and EV prices become more competitive with their conventional counterparts, subsidies can be adapted and redirected in order to increase access to vehicles and improve their affordability, targeting groups where adoption is slower. Financial incentives may also be combined with disincentives for high-emitting vehicles by adding emission-based taxes or fees.

More information

This toolkit provides an overview of the most important elements of each policy instrument, but we encourage policymakers to explore additional resources available for more in-depth information. 


Policy Packages – Vehicle Energy Efficiency

Immediate opportunities
Significant fuel savings are achievable through behavioural actions including the adoption of best practices for driving and vehicle maintenance, and lower speeds.

The share of electric cars in overall car sales is set to exceed 40% in 2030 under today’s policy settings.



Efficiency improvement rates for cars are 60% faster in countries with fuel economy regulations and purchase incentives than in those without.

Regulation

  • Vehicle fuel economy standards result in greatly reduced fuel use provided they are kept up to date, well monitored and properly enforced.
  • Regulating the import and export of used vehicles can help improve fleet fuel economy and ensure road safety and air quality benefits.
  • Regulatory and market signals, such as through stringent standards and target setting, help bring electric vehicles to the market, by providing an impetus to manufacturers to develop these technologies.
  • Regulation can also help ensure the required infrastructure, such as standardised charging, is in place.

Information

  • Information campaigns on carsharing practices and more fuel-efficient driving help people take informed action relating to energy and cost savings. Campaigns are more effective when based on behavioural insights and targeted strategies.
  • Labels inform consumers, identifying the most efficient vehicles allowing people to choose vehicles that cost less to run. Labels for new and used vehicles help ensure benefits for all vehicle purchasers.

Incentives

  • Incentives can make vehicle costs cheaper at point of purchase, such as through grants or lower registration fees. They can also reduce on-going costs, through for example free parking and exemptions from congestion tolls.
  • Government grants for strategic charging infrastructure, such as charging stations in homes and workplaces or fast charging along expressways, encourage the adoption of electric vehicles reflecting that purchase decisions are influenced by the availability of infrastructure.
  • Such incentives facilitate the early adoption of electric vehicles and can be phased out as uptake grows.
  • Vehicle taxation and duties, can be structured to incentivise the purchase of more efficient vehicles.


Related Case Studies

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