Fuel Efficiency Targets and New Energy Vehicles Credit Trading System to be implemented in 2019

27 September 2017 – Several Chinese ministries have reiterated the need to implement appropriate policies in order to accomplish domestic development targets regarding the transition towards new energy vehicles (NEV) in the transport sector. This includes the target for domestic and international car manufacturers to sell and produce 2 million NEVs by 2020 and 7 million by 2025, accounting for 20% of total car sales. The five ministries; Ministry of Industry and Information Technology of the People’s Republic of China (MIIT), Ministry of Commerce (MOFCOM), Ministry of Finance (MOF), General Administration of Customs China (GACC) and State Administration for Quality Supervision and Inspection and Quarantine (AQSIQ) jointly published “Administrative Management Measures for the Average Fuel Consumption and NEV credits of Passenger Vehicles Companies”.

The measures, to be enforced on 1 April 2018, include both average fuel consumption credits and NEV credits targeted at all car manufacturers in China as well as international producers that export to China. A trading platform will be established for registered companies that do not meet the set targets to buy credits off competitors that achieve production numbers above the set targets. This credit trading system will be accredited by the above mentioned five ministries.

It remains unclear if and how the NEV credit trading system will be linked to the upcoming national ETS.