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Proposed Temporary Management Regulation for Corporate Average Fuel Consumption and New-energy Vehicle Credits for New Passenger Cars in China

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Hongyan Cui, Hui He
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On September 22, 2016, China’s Ministry of Industry and Information Technology (MIIT) proposed a Temporary Management Regulation for Corporate Average Fuel Consumption (CAFC) and New-Energy Vehicle (NEV) Credits for public comment. This proposal was rolled out in the context of the Chinese central government’s decision to phase out its decade-long subsidy program for NEVs in 2021. The proposal essentially would add a new NEV credit program to the existing corporate average fuel consumption (CAFÉ) regulation for passenger cars overseen by MIIT. This regulation applies to all enterprises selling passenger cars in China, including domestic manufacturers and importers. All passenger cars sold in China, regardless of fuel type, will be taken into account. The program aims to improve the fuel efficiency of traditional-fuel vehicles and to promote the deployment of NEVs in China. And, this policy update provides an overview of the key elements of the proposal.