Press release

[Press release] Saudi Arabia joins major economies in increasing auto efficiency

[December 5, 2014]—On November 16, the Kingdom of Saudi Arabia announced a historic fuel efficiency standard for new light duty vehicles. The proposed standard will apply to Model Years 2016 through 2020 passenger vehicles, and will increase average fuel economy by nearly 20% from the current level. Standards for Model Years 2021–2025 will be proposed following a thorough review of the existing standards in 2018. It is estimated that the proposed program will in 2030 result in a savings of nearly 180,000 barrels of oil per day, and a reduction in CO2 emissions of 25 million tons annually.

In taking this action, the Kingdom of Saudi Arabia (KSA) joins many of the world’s major economies that have adopted fuel economy standards (e.g., United States, European Union, Japan, China). The KSA program is aligned with the United States fuel economy standards; it begins with an initial four-year lag, to help manufacturers achieve the near-term standards easily, then closes the gap over the planned time frame of the regulation.

“This is a landmark achievement,” said Drew Kodjak, Executive Director of the International Council on Clean Transportation, who noted that these are the first standards adopted in the Middle East. “And an excellent example of international alignment as this program closely tracks the United States fuel economy standards.” It also shows a purposeful commitment to setting long-term standards. And it is uniquely innovative in incorporating used imported vehicles as well as new, something no other county has managed to accomplish.

The proposal exhibits numerous best practices in developing efficiency standards. It requires annual reduction in fuel consumption at a rate of approximately 4% a year between 2016 and 2020. The size-based regulatory design inherently accommodates consumer preferences and market forces while requiring accelerated technology deployment. The performance-based standards promote diverse engine, transmission, and lightweighting efficiency technologies that automakers are developing and deploying around the world. The standards also include flexibilities and a phase-in period that align with international norms and established auto industry practices.

The proposal also exemplifies effective governmental action at the national level in the realm of energy policy. “The regulatory team clearly did their homework,” said Anup Bandivadekar, ICCT’s Passenger Vehicle Program Director. “The Saudi Energy Efficiency Program has been committed to a comprehensive, thorough and a flexible standard. It’s a model that other national governments can look to, and opens up a door to adoption of similar standards across the Gulf Cooperation Council.”


Contact: Joe Schultz, [email protected]