Working Paper
Assessing Canada’s 2025 passenger vehicle greenhouse gas standards: Technology deployment and costs
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 paper presents the core results of the ICCT analysis: the projected technology deployment in the Canadian vehicle fleet, with associated per-vehicle costs, by car and truck class and by vehicle type.
By ICCT estimates, meeting the 2025 standards costs, on average, $865 (2015 CAD, $651 USD) more per vehicle than meeting the 2020 standards. The costs are higher when using EPA cost inputs, at $1,368 ($1,029 USD) more per vehicle for meeting the 2020 standards. In general, the total costs for Canadian manufacturers are quite similar to those incurred by the same manufacturers in the United States
If Canada maintains its targets along with California and the Section 177 states, approximately 40% of the combined Canadian-U.S. market would be subject to 2025 targets by MY 2025, and the remaining 60% would be covered under 2020 targets until MY 2025. This bifurcated market scenario leads to an overall cost increase of $41–$67 CAD, which represents roughly a 5% percent increase in the cost of complying with the 2025 standards. The reason costs are affected so marginally if the market splits is that the most important technologies to meet the 2025 targets are well-known, broadly applied improvements to conventional vehicles.
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: Methodology and OMEGA model description
Assessing Canada’s 2025 passenger vehicle greenhouse gas standards: Benefits analysis
