The gap between real-world fuel consumption and emissions of carbon dioxide from light-duty vehicles (LDV), and their laboratory values, is increasingly apparent around the world, including in China. ICCT has been tracking the gap between real-world and type-approval fuel consumption of LDVs since 2017.

The second phase of China’s Parallel Management Regulation for Corporate Average Fuel Consumption and New Energy Vehicle Credits began on January 1, 2021. The policy regulates how both corporate average fuel consumption (CAFC) credits and new energy vehicle (NEV) credits are calculated and traded.