Working Paper

Assessing Canada’s 2025 passenger vehicle greenhouse gas standards: Methodology and OMEGA model description

This paper is part of a series of reports on analysis done by the ICCT on Canada-specific technology pathways, costs, and benefits of Canada’s 2025 passenger vehicle greenhouse gas standards. The analysis compares the standards in force to the alternative of following the Trump Administration’s proposal to roll back the 2025 U.S. fuel economy and greenhouse gas emissions standards.

This analysis applied the Optimization Model for Reducing Emissions of Greenhouse Gases (OMEGA) to the Canadian baseline fleet to assess the costs and benefits of different regulatory scenarios. This paper describes the methodology and model used in carrying out the analysis.

OMEGA was developed by the EPA as a tool to evaluate the impact of the U.S. 2012–2016 GHG regulations for the light-duty vehicle fleet and was used again in the development and assessment of the 2017–2025 standards, and updated in 2016 for the midterm review analysis.

The OMEGA model combines the technology and cost inputs with the baseline fleet data to project how various manufacturers would apply the available technology to meet increasingly stringent CO2 emission targets. The result is a projection of the technologies that may need to be added to each vehicle platform, along with the resulting costs, to reach the CO2 targets for various target scenarios.

Consumer benefits from driving a more efficient vehicle were also evaluated. ICCT’s benefits analysis draws from the technology and cost assessment model outputs, and inputs for fuel price, vehicle survival rates, annual mileage driven, that are unique to Canada. The consumer benefits of LDV efficiency technology under both scenarios were evaluated using three distinct measures: 

  • Payback period: the number of years it takes for cumulative fuel savings to recover the initial investment in technology
  • Lifetime fuel savings: the cumulative fuel savings over the lifetime of the vehicle, including those that take place after the investment in technology has been fully recovered
  • Benefit-to-cost ratio: the fuel savings divided by the investment in vehicle technology, including any changes in maintenance costs, insurance costs, and vehicle taxes over the vehicle’s lifetime. 

Related Publications:

Assessing Canada’s 2025 passenger vehicle greenhouse gas standards: Characteristics of the Canadian fleet
Assessing Canada’s 2025 passenger vehicle greenhouse gas standards: Technology deployment and costs
Assessing Canada’s 2025 passenger vehicle greenhouse gas standards: Benefits analysis