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Car Labeling: A Comparison of Case Studies



                        Max Grünig
                     Ecologic Institute
             IDEC: Debate Automóvel e Consumo
www.ecologic.eu



Ecologic Institute
  Independent Research Institute
     Environmental Research
     Policy Analysis
     120 employees




  Offices in Berlin, Brussels, Washington DC und San Mateo
  Experience and Contacts: Car Labeling
     Study commissioned by the European Parliament (2010)
     ICCT, Friends of the Earth Europe, Germany Association of the Automotive
     Industry, various manufacturers



                         Car Labeling: A Comparison of Case Studies – Max Grünig   1
www.ecologic.eu



Overview: Vehicle Energy Efficiency



                                                      Peak Oil
                                 Climate
                                 Change

                                                 Rising
                                                  Fuel
                                                 Costs




                                Need for Vehicle Energy
                                      Efficiency
                       Car Labeling: A Comparison of Case Studies – Max Grünig   2
www.ecologic.eu



EU Policy Instruments
  Directive1999/94/EC: Information for new passenger cars for sale or
  lease
     Label
     Guide
     Poster display
     Printed promotional material

  Regulation (EC) No 443/2009: Emission performance standards for
  manufacturers

                                             Manufacturer                            Consumer
  „Push-Pull“ effect                          Standards                             Information
                                               Influence                              Influence
                                                Supply                                 Demand


                          Car Labeling: A Comparison of Case Studies – Max Grünig                 3
www.ecologic.eu



Overview: Car Labeling
  Information regarding fuel economy and CO2 emissions costly to obtain
  Provide consumers with relevant information


                                                                 Compare                 Make
   Remove                        Link with
                                                                 passenger             informed
 information                     monetary
                                                                 cars more            purchasing
   barriers                       savings
                                                                   easily              decisions



  Manufacturers compete according to fuel economy
                  Climate Change Mitigation
                  Energy Independence
                  Cost savings and Effiency

                            Car Labeling: A Comparison of Case Studies – Max Grünig                4
www.ecologic.eu

                                                                         Illustration of the Label
France
Label Attribute

Format            Absolute: CO2 Emissions
                  Static
Categories        7
Additional        city and highway fuel
Information       consumption, link to
                  website


Assessment        No running costs on label
                  but
                  Bonus/Malus System links
                  directly to the label



                               Car Labeling: A Comparison of Case Studies – Max Grünig               5
www.ecologic.eu

                                                                      Illustration of the Label
Germany
Label Attribute
Format            Relative: CO2 Efficiency by
                  car mass
                  Semi-Dynamic: Percentage
                  deviation from the
                  reference value
                  (potential A++,A+++)
Categories        8 (so far)
Additional        Electricity consumption, tax
Information       information, fuel and
                  electricity costs
Assessment        No inventive for lighter
                  vehicles
                  Vehicle registration tax
                  linked to CO2 emissions
                               Car Labeling: A Comparison of Case Studies – Max Grünig            6
www.ecologic.eu



Germany
                                                                                    C
 CO2 Emissions
                                                                                    B

                                                                                    A

                                                                                    A+




                                                                                  Mass


                        Car Labeling: A Comparison of Case Studies – Max Grünig          7
www.ecologic.eu

                                                                      Illustration of the Label
The Netherlands
Label Attribute

Format            Relative: CO2 Emissions by
                  realtive footprint
                  (weighted)
                  Dynamic
Categories        7
Additional
                                     -
Information
Assessment        No information about fuel
                  costs
                  No incentive for smaller
                  vehicles, but for lighter
                  vehicles


                               Car Labeling: A Comparison of Case Studies – Max Grünig            8
www.ecologic.eu

                                                                    Illustration of the Label
Switzerland
Label
Attribute
Format        Dual Label
              Absolute/Static: CO2
              Emissions (continuous scale
              with fleet average)
              Relative/Dynamic: Energy
              Efficiency by mass
Categories    7
Additional    link to website
Information
Assessment    No running costs
              Too complex 
              information overload?


                            Car Labeling: A Comparison of Case Studies – Max Grünig             9
www.ecologic.eu

                                                                    Illustration of the Label
Switzerland
Label
Attribute
              Separate label for electric
              vehicles
Additional    CO2 emissions from
Information   electricity generation,
              assuming the Swiss
              electricity consumption
              mix
Assessment    Plug-in electric vehicles 
              well-to-wheels basis; other
              vehicle types  tank-to-
              wheels basis



                            Car Labeling: A Comparison of Case Studies – Max Grünig             10
www.ecologic.eu

                                                                    Illustration of the Label
United Kingdom
Label
Attribute
Format        Absolute: CO2 Emissions
              Static
Categories    13
Additional    Fuel costs, vehicle excise
Information   duty (direct link between
              label and tax),
              link to website, logos 
              branding and legitimating
              Voluntary for used cars
Assessment    A lot of information
              provided  potential
              overload?


                            Car Labeling: A Comparison of Case Studies – Max Grünig             11
www.ecologic.eu

                                                                       Illustration of the Label
Brazil
Label Attribute

Format            Relative: Energy consumption by
                  car class
                  Static
Categories        5 (but in 8 car classes)
Additional        Ethanol and gasoline
Information       consumption (if appll.), city and
                  highway,
                  Plus CO2-emissions
                  logos  branding and
                  legitimation
Assessment        Voluntary
                   compliance issues, overlapping
                  categories, No running costs
                  less incentive for lighter vehicles


                               Car Labeling: A Comparison of Case Studies – Max Grünig             12
www.ecologic.eu

                                                                    Illustration of the Label
United States
Label
Attribute
Format        Absolute: Combined
              continuous scale for fuel
              economy and GHG emissions
              Static
Additional    Additional smog scale, annual
Information   fuel costs and savings over 5
              years; car class range; MPG:
              city, highway and combined;
              logos  branding and
              legitimation, online tools,
              Smartphone application
Assessment    Focuses on costs (cultural
              reasons?)
              Potential information overload


                            Car Labeling: A Comparison of Case Studies – Max Grünig             13
www.ecologic.eu

                                                                   Illustration of Electric
United States                                                     and Hybrid Car Label(s)

Label
Attribute
              Separate label for electric
              and hybrid vehicles
Format        Absolute: same scale as other
              passenger vehicles
              Static
Additional    Charge time, driving range,
Information   fuel economy by electricity
              and gasoline
Assessment    Focus on costs
              Potential information
              overload




                           Car Labeling: A Comparison of Case Studies – Max Grünig            14
www.ecologic.eu



Debate: Relative vs. Absolute Label
  Pros of relative label:
     Enables consumers to compare fuel efficiency of cars within vehicle class
         efficiency vs. fuel economy
     Complements decision making process of car buyer (two-stage process)


       1. Vehicle Class                                           2. Buying Decision


             •    Reliability                                              • Fuel Consumption
             •    Security                                                 • Environmental
             •    Comfort                                                    Factors
             •    Price




                              Car Labeling: A Comparison of Case Studies – Max Grünig           15
www.ecologic.eu



Debate: Relative vs. Absolute Label
  Cons of relative label:
     Complicated method and calculations
     No incentive for manufacturers to build smaller / lighter cars  manipulation
     Could create confusion among consumers




                          Car Labeling: A Comparison of Case Studies – Max Grünig   16
www.ecologic.eu



Best Practices
  Mandatory labelling for 100% of LDV is the global standard
  Provide cost information on label
                               fuel consumption              Translate fuel
                                  factored into            consumption and
                                decisions based             CO2 emissions
                                 on economic                into monetary
                               implications, not              costs and
                                environmental                  savings
                                      ones

  Link label to fiscal policies (complementarity of measures)
  Avoid information overload
  Present information in a clear and concise manner (units that can be
  intuitively understood
  Use branding strategies and supplement label with online-tools
  Adapt information to local consumer preferences  market research

                          Car Labeling: A Comparison of Case Studies – Max Grünig   17
www.ecologic.eu



Awareness
   German consumers understand the impacts on the environment,
   knowledge about the car label is increasing > continuous process
                                                                             Do you know about the new CO2
                                                                             Efficiency car label?
Please tell us if the following factors are
relevant to your car purchasing decision

                                                                                                              Yes

  Fuel consumption

          Fuel costs

    CO2 Emissions
                                                      Very                                                    No
                                                      Important
    Fuel/ Drive type




                                                                                     Don’t know
                                                      Rather
               Taxes                                  Important


  Size (# seats, etc.)

        Motorization

               Brand                                                                              Jan. 2012         Oct. 2012


                                                                           Basis: 1,680 New Car Buyers, Oct. 2012     Source: DENA, 2012
 Basis: 1,680 New Car Buyers, Oct. 2012
                                          Car Labeling: A Comparison of Case Studies – Max Grünig                                   18
www.ecologic.eu



Overall Assessment
  CO2 Mitigation            Average CO2 emissions of new car registrations in
                            selected Member States




CO 2 Emissions are
  decreasing 
reduction due to a
  combination of
measures including
targets, taxes and
     labeling




                                                                                     Source: AEA, 2011

                           Car Labeling: A Comparison of Case Studies – Max Grünig                       19
www.ecologic.eu



Key messages
1. Mandatory labelling for 100% of LDV is the global standard
2. Provide cost information on label
3. Link label to fiscal policies (complementarity of measures)
4. Avoid information overload
5. Present information in a clear and concise manner (units that can be
   intuitively understood
6. Use branding strategies and supplement label with online-tools
7. Adapt information to local consumer preferences  market research




                          Car Labeling: A Comparison of Case Studies – Max Grünig   20
www.ecologic.eu




     Thank you for your attention!


                               Max Grünig


Ecologic Institute, Pfalzburger Str. 43-44, D-10717 Berlin
    Tel. +49 (30) 86880-0, Fax +49 (30) 86880-100
               max{dot}gruenig{at}ecologic{dot}eu
                             www.ecologic.eu


                Car Labeling: A Comparison of Case Studies – Max Grünig   21

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Debate Automóvel e Consumo - Max Gruenig parte 1

  • 1. www.ecologic.eu Car Labeling: A Comparison of Case Studies Max Grünig Ecologic Institute IDEC: Debate Automóvel e Consumo
  • 2. www.ecologic.eu Ecologic Institute Independent Research Institute Environmental Research Policy Analysis 120 employees Offices in Berlin, Brussels, Washington DC und San Mateo Experience and Contacts: Car Labeling Study commissioned by the European Parliament (2010) ICCT, Friends of the Earth Europe, Germany Association of the Automotive Industry, various manufacturers Car Labeling: A Comparison of Case Studies – Max Grünig 1
  • 3. www.ecologic.eu Overview: Vehicle Energy Efficiency Peak Oil Climate Change Rising Fuel Costs Need for Vehicle Energy Efficiency Car Labeling: A Comparison of Case Studies – Max Grünig 2
  • 4. www.ecologic.eu EU Policy Instruments Directive1999/94/EC: Information for new passenger cars for sale or lease Label Guide Poster display Printed promotional material Regulation (EC) No 443/2009: Emission performance standards for manufacturers Manufacturer Consumer „Push-Pull“ effect Standards Information Influence Influence Supply Demand Car Labeling: A Comparison of Case Studies – Max Grünig 3
  • 5. www.ecologic.eu Overview: Car Labeling Information regarding fuel economy and CO2 emissions costly to obtain Provide consumers with relevant information Compare Make Remove Link with passenger informed information monetary cars more purchasing barriers savings easily decisions Manufacturers compete according to fuel economy Climate Change Mitigation Energy Independence Cost savings and Effiency Car Labeling: A Comparison of Case Studies – Max Grünig 4
  • 6. www.ecologic.eu Illustration of the Label France Label Attribute Format Absolute: CO2 Emissions Static Categories 7 Additional city and highway fuel Information consumption, link to website Assessment No running costs on label but Bonus/Malus System links directly to the label Car Labeling: A Comparison of Case Studies – Max Grünig 5
  • 7. www.ecologic.eu Illustration of the Label Germany Label Attribute Format Relative: CO2 Efficiency by car mass Semi-Dynamic: Percentage deviation from the reference value (potential A++,A+++) Categories 8 (so far) Additional Electricity consumption, tax Information information, fuel and electricity costs Assessment No inventive for lighter vehicles Vehicle registration tax linked to CO2 emissions Car Labeling: A Comparison of Case Studies – Max Grünig 6
  • 8. www.ecologic.eu Germany C CO2 Emissions B A A+ Mass Car Labeling: A Comparison of Case Studies – Max Grünig 7
  • 9. www.ecologic.eu Illustration of the Label The Netherlands Label Attribute Format Relative: CO2 Emissions by realtive footprint (weighted) Dynamic Categories 7 Additional - Information Assessment No information about fuel costs No incentive for smaller vehicles, but for lighter vehicles Car Labeling: A Comparison of Case Studies – Max Grünig 8
  • 10. www.ecologic.eu Illustration of the Label Switzerland Label Attribute Format Dual Label Absolute/Static: CO2 Emissions (continuous scale with fleet average) Relative/Dynamic: Energy Efficiency by mass Categories 7 Additional link to website Information Assessment No running costs Too complex  information overload? Car Labeling: A Comparison of Case Studies – Max Grünig 9
  • 11. www.ecologic.eu Illustration of the Label Switzerland Label Attribute Separate label for electric vehicles Additional CO2 emissions from Information electricity generation, assuming the Swiss electricity consumption mix Assessment Plug-in electric vehicles  well-to-wheels basis; other vehicle types  tank-to- wheels basis Car Labeling: A Comparison of Case Studies – Max Grünig 10
  • 12. www.ecologic.eu Illustration of the Label United Kingdom Label Attribute Format Absolute: CO2 Emissions Static Categories 13 Additional Fuel costs, vehicle excise Information duty (direct link between label and tax), link to website, logos  branding and legitimating Voluntary for used cars Assessment A lot of information provided  potential overload? Car Labeling: A Comparison of Case Studies – Max Grünig 11
  • 13. www.ecologic.eu Illustration of the Label Brazil Label Attribute Format Relative: Energy consumption by car class Static Categories 5 (but in 8 car classes) Additional Ethanol and gasoline Information consumption (if appll.), city and highway, Plus CO2-emissions logos  branding and legitimation Assessment Voluntary  compliance issues, overlapping categories, No running costs less incentive for lighter vehicles Car Labeling: A Comparison of Case Studies – Max Grünig 12
  • 14. www.ecologic.eu Illustration of the Label United States Label Attribute Format Absolute: Combined continuous scale for fuel economy and GHG emissions Static Additional Additional smog scale, annual Information fuel costs and savings over 5 years; car class range; MPG: city, highway and combined; logos  branding and legitimation, online tools, Smartphone application Assessment Focuses on costs (cultural reasons?) Potential information overload Car Labeling: A Comparison of Case Studies – Max Grünig 13
  • 15. www.ecologic.eu Illustration of Electric United States and Hybrid Car Label(s) Label Attribute Separate label for electric and hybrid vehicles Format Absolute: same scale as other passenger vehicles Static Additional Charge time, driving range, Information fuel economy by electricity and gasoline Assessment Focus on costs Potential information overload Car Labeling: A Comparison of Case Studies – Max Grünig 14
  • 16. www.ecologic.eu Debate: Relative vs. Absolute Label Pros of relative label: Enables consumers to compare fuel efficiency of cars within vehicle class efficiency vs. fuel economy Complements decision making process of car buyer (two-stage process) 1. Vehicle Class 2. Buying Decision • Reliability • Fuel Consumption • Security • Environmental • Comfort Factors • Price Car Labeling: A Comparison of Case Studies – Max Grünig 15
  • 17. www.ecologic.eu Debate: Relative vs. Absolute Label Cons of relative label: Complicated method and calculations No incentive for manufacturers to build smaller / lighter cars  manipulation Could create confusion among consumers Car Labeling: A Comparison of Case Studies – Max Grünig 16
  • 18. www.ecologic.eu Best Practices Mandatory labelling for 100% of LDV is the global standard Provide cost information on label fuel consumption Translate fuel factored into consumption and decisions based CO2 emissions on economic into monetary implications, not costs and environmental savings ones Link label to fiscal policies (complementarity of measures) Avoid information overload Present information in a clear and concise manner (units that can be intuitively understood Use branding strategies and supplement label with online-tools Adapt information to local consumer preferences  market research Car Labeling: A Comparison of Case Studies – Max Grünig 17
  • 19. www.ecologic.eu Awareness German consumers understand the impacts on the environment, knowledge about the car label is increasing > continuous process Do you know about the new CO2 Efficiency car label? Please tell us if the following factors are relevant to your car purchasing decision Yes Fuel consumption Fuel costs CO2 Emissions Very No Important Fuel/ Drive type Don’t know Rather Taxes Important Size (# seats, etc.) Motorization Brand Jan. 2012 Oct. 2012 Basis: 1,680 New Car Buyers, Oct. 2012 Source: DENA, 2012 Basis: 1,680 New Car Buyers, Oct. 2012 Car Labeling: A Comparison of Case Studies – Max Grünig 18
  • 20. www.ecologic.eu Overall Assessment CO2 Mitigation Average CO2 emissions of new car registrations in selected Member States CO 2 Emissions are decreasing  reduction due to a combination of measures including targets, taxes and labeling Source: AEA, 2011 Car Labeling: A Comparison of Case Studies – Max Grünig 19
  • 21. www.ecologic.eu Key messages 1. Mandatory labelling for 100% of LDV is the global standard 2. Provide cost information on label 3. Link label to fiscal policies (complementarity of measures) 4. Avoid information overload 5. Present information in a clear and concise manner (units that can be intuitively understood 6. Use branding strategies and supplement label with online-tools 7. Adapt information to local consumer preferences  market research Car Labeling: A Comparison of Case Studies – Max Grünig 20
  • 22. www.ecologic.eu Thank you for your attention! Max Grünig Ecologic Institute, Pfalzburger Str. 43-44, D-10717 Berlin Tel. +49 (30) 86880-0, Fax +49 (30) 86880-100 max{dot}gruenig{at}ecologic{dot}eu www.ecologic.eu Car Labeling: A Comparison of Case Studies – Max Grünig 21