Introduction

The SSR Toolkit is designed to serve as a comprehensive resource for government decision makers including policymakers, regulatory agencies, and any supporting organizations committed to electrification of the light-duty vehicle transportation sector. By providing detailed information on the design of SSRs, this Toolkit equips decision makers with the tools they need to craft effective, contextually appropriate policies. Whether working in departments of transportation, environment, or energy, decision makers will find clear guidance on regulatory design with the intent of increasing the adoption of ZEVs and/or improving vehicle economy.

At its core, the Toolkit aims to facilitate informed decision making, offering proven policy solutions from around the world to streamline the adoption of SSRs. It presents comparative examples to help align national regulations with global best practices, ensuring that decision makers are setting ambitious targets and leveraging successful strategies to meet them. By digesting the work of global experts into a user-friendly format, this Toolkit aims to support the rapid development and implementation of policies tailored to specific national or regional contexts.

Defining supply-side regulations

Figure 1. Existing supply-side regulations by type and region. *Note that criteria pollutant standards were not included in the scope of the study but would fall under the performance standards type.

In this Toolkit, SSRs are defined as policies that require vehicle suppliers to meet technology or performance standards through the sale of vehicles that aim to directly or indirectly reduce emissions. This study identified 18 regions that have regulations that satisfy this definition. Based on the SSR definition, the three SSR policy instruments are: Technology standards, performance standards, and a combination of the two (hybrid standards) (Figure 1). Three regions have technology standards, 13 have performance standards, and two have hybrid standards. One regulation was identified at a supranational level (the EU), two regulations were identified at the subnational level (California), and the rest were SSRs implemented on a national level. Note that other SSRs may exist at subnational levels but were not included in the analysis.

Technology standards

A technology standard specifies the technology by which the standard must be met. ZEV sales standards and ICEV bans fall under this definition as they require a percentage sales of ZEVs or a 0% sale of ICEVs, respectively. ZEV sales standards require manufacturers to sell a certain proportion of their fleet as ZEVs (measured as a percentage of total vehicle sales). In these policies, ZEVs usually BEVs, FCEVs, and although only a partial ZEV, PHEVs. Unlike ZEV sales standards, ICEV bans do not prescribe a transitional reduction in ICEVs but a single target of 0% conventional or ICEV sales.

Performance standards

A performance standard specifies an output by which the standard must be met. This includes greenhouse gas (GHG) standards and fuel economy (FE) standards that specify a certain vehicle emissions intensity or efficiency that new vehicles must meet, respectively. GHG standards require auto manufacturers to meet a level of emissions across all vehicle sales (measured in gCO₂/mi or equivalent). FE standards require auto manufacturers to meet a level of efficiency across all vehicle sales (measured in liters per 100 kilometers [L/100km] or equivalent).

Under FE standards, two types of metrics exist: an energy efficiency metric, and an energy intensity metric. For a SSR, an efficiency metric has a fixed fuel requirement with increasing distance, and an intensity metric has a fixed distance with decreasing fuel requirements. An example of a FE standard that uses an intensity metric is the India SSR that uses L/100km, whereas the US FE standard uses an efficiency metric - miles per gallon (MPG).

Hybrid standards

Hybrid standards are defined as SSRs that have both a technology and a performance standard where these standards are connected through credit trading. Under this definition, two hybrid SSRs were identified: The UK, and China. The UK regulation requires regulated entities to meet a sales requirement for ZEVs, as well as meet a GHG standard for ICEVs. In 2018, China implemented the Dual-Credit policy, which requires regulated entities to meet a New Energy Vehicle (NEV) standard, as well as a Corporate Average Fuel Consumption (CAFC) standard. Entities can trade credits between these standards to achieve compliance. Hybrid standards are beneficial as they simultaneously drive ZEV adoption while reducing emissions or improving efficiency of ICEVs.

While other regions had more than one SSR, they were not categorized as hybrids because the regulations were not connected. For example, the US has the Corporate Average Fuel Economy (CAFE) standard and the GHG standard, which have historically been aligned with one another, but are now separate regulations. The South Korea regulation requires regulated entities to comply either with the GHG standard or the corresponding efficiency standard and is therefore not considered a hybrid because compliance with more than one SSR type is not required. In Canada, the GHG and ZEV standards exist in the same regulation, however, they are not connected to one another through ability to trade credits or other means. California requires regulated entities to meet two regulations: A ZEV sales standard and a GHG standard. While these regulations used to be connected through credit trading, they are not any more.

SSR subtype comparison

This Toolkit will focus on the design of the three main subtypes of SSRs that provide a transitional approach to increasing ZEV sales: ZEV sales standards, GHG standards, and FE standards. As these three SSRs form the foundation for hybrid standards, the information provided here can be applied to create a hybrid standard. Given the simple policy design of ICEV bans (i.e. a static target for a given year), this SSR subtype is not considered further here. A comparison of the three main transitional SSRs are presented in Table 1.

Table 1. Comparison of SSR types

Each SSR subtype has strengths and drawbacks, depending on the criteria being evaluated and the way in which the SSR is designed. In addition to this, the regional context in which the SSR is implemented also plays a role in determining which regulation type is most appropriate. Because of this, there is no one SSR type that is definitively superior to the others. However, Table 2 below provides an overview of how each SSR type performs against three criteria that may be important to decision makers when choosing a type:

• Simplicity - how straightforward is it to design and administer the SSR?
• Flexibility - how many alternative pathways do manufacturers have to comply with the SSR?
• Public support - what is the level of public support for the SSR?

Table 2. Evaluation of SSR types

It is important to highlight that while Table 2 provides a general evaluation of SSR types, the level of simplicity, flexibility, and public support is all dependent on the design of each SSR.

Simplicity

For regions with limited resources - this can include few employees, limited SSR information or expertise, limited existing data collection, and/or limited funding - implementing a simple SSR may be the most feasible option. "Simplicity" as defined here relates to the simplicity of the SSR design, as well as administrative simplicity. ZEV sales standards can be designed in a simple manner that minimizes administrative burden and resource requirements. It is less easy to design a simple GHG or FE standard. However, in order to design a SSR that does not trade away effectiveness for simplicity, there are minimum design requirements that need to be met for all SSR types. Once these minimum design requirements have been included in a ZEV sales standard, the simplicity advantage of this SSR type is diminished.

Flexibility

A flexible SSR is one that provides multiple pathways for compliance. Broadly, "flexibility" can be defined as the regulatory design that allows for the greatest degree of choice. At face value, GHG and FE standards appear to be more flexible than a ZEV sales standard because they are technology neutral, allowing manufacturers to meet the standards by any means. However, as GHG and FE standards become increasingly stringent (i.e. require very low levels of GHG emissions, and high levels of FE), the flexibility of these SSRs diminishes. Therefore, the stringency of the policy design plays a role in determining the flexibility differences between types.

Note that the concept of flexibilities here is distinct from the flexible design elements discussed in later documents.

Public support

Some studies have shown that there is greater public support for GHG and FE standards, compared to ZEV sales standards¹. However, these studies are usually comparing a ZEV sales standard (or ZEV mandate) with a 100% ZEV target and a GHG or FE standard that is much less ambitious. Therefore, it is difficult to distinguish whether the lack of ZEV sales standard support relates to the ambitious targets or the policy instrument itself. What is well understood is that SSRs have more public support than alternative policy instruments like taxes.

The SSR Toolkit

SSR Toolkit overview

Figure 2. SSR Toolkit sections

The SSR Toolkit is divided into four sections (Figure 2):

1. Assessing readiness & policy context
2. Building the supply-side regulation
   1. ZEV pathway
      1. Guide & manual
   2. GHG/FE pathway
      1. Manual
3. Navigating design tradeoff & interactions
4. Metrics & measurement methods.

Each of the four sections build upon one another, increasing in detail and nuance. Section 1, Assessing readiness & policy context, guides users through a data collection and availability exercise for their own region to help in understanding the region's readiness for a SSR. Section 2, Building the supply-side regulation, provides users with SSR policy design options, as well as, a comprehensive (but not exhaustive) exploration of policy design elements. This section is split into two pathways, the ZEV sales standard pathway and the GHG/FE standard pathway, allowing users to choose the SSR most appropriate for their region and read through information relevant to the chosen SSR. Section 3, Navigating design tradeoffs & interactions, discusses policy design tradeoffs and design element interactions to provide users with an understanding of the consequences of different policy designs. Finally, Section 4, Metrics & measurement methods, details different approaches to measuring SSR metrics to help users choose the metrics that fit best with their region's context. These four sections are described in further detail below.

1. Assessing readiness & policy context

   The Assessing readiness & policy context section is a key first step in pursuing SSRs in a region. This section is designed to guide decision makers through a comprehensive assessment of their country's current vehicle fleet composition, governance structures, and enforcement capacity before implementing SSRs. The initial assessment helps determine the most suitable type of SSR for a region's specific conditions, maximizing its impact. This baseline analysis can also be conducted by SSR expert groups to propose optimal design options based on a region's context. This initial assessment ensures that any new regulations are practical, enforceable, and aligned with the nation's existing resources and operational capacity. Decision makers must evaluate the roles of regulatory and enforcement agencies, determine the availability of data systems, and assess the ability of local institutions to monitor compliance and impose penalties effectively. Additionally, understanding vehicle fleet characteristics, such as vehicle size, fuel economy, and origin, helps tailor SSRs to the specific context, ensuring that they address the most impactful areas of the supply chain. By examining similar efforts in other regions, the baseline analysis offers a foundation for decision makers to build upon, helping to create contextually appropriate and sustainable regulatory frameworks.

2. Building the supply-side regulation

   The Building the supply-side regulation section provides users with guidance on SSR policy design and a discussion around each design element. This section is split into two pathways: the ZEV pathway and the GHG/FE pathway. The ZEV pathway will provide guidance on different options for policy design based on a simplicity hierarchy. Both pathways cover design elements that relate to defining regulatory scope, standard setting, vehicle and credit accounting, reporting, compliance and enforcement, and flexibilities. Users who know which pathway their region wishes to take may just read through the relevant pathway. Otherwise, users can read through both pathways to determine the design options available to their region.

3. Navigating design tradeoff & interactions

   The Navigating design tradeoff & interactions section takes a macro view of SSR design to highlight some of the broader tradeoffs and design element interactions that should be considered. This section discusses interactions between different design elements and the implication of those interactions on the outcome of the regulation. It also discusses potential stakeholder responses to the regulation and highlights ways in which stakeholders might attempt to push for the inclusion of flexible design elements.

4. Metrics & measurement methods

   The Metrics & measurement methods section provides decision makers a technical deep-dive into ways of measuring important metrics included in SSRs. This section discusses the implications of different metrics on real-world GHG emissions; It highlights how ZEVs are measured in each SSR type, and compares different drive cycles. Also discussed in this section is how regulations might include the measurement of upstream or lifecycle emissions.

Supply-side regulations analysis

To inform the creation of the SSR Toolkit, a content analysis was conducted to assess and compare existing vehicle SSRs². The International Energy Agency (IEA) policies database was used to identify vehicle SSRs by searching for keywords such as 'ZEV', 'mandate', 'performance', 'standard', 'fuel economy', and 'fuel efficiency'. Out of all the SSRs that were flagged as 'In force', a sample of six focus regions were chosen for inclusion in the Toolkit (Table 1): Two regions with ZEV sales standards (California and Canada), four regions with GHG standards (European Union [EU], Mexico, Australia, and US), one region with a FE standard (US). Four of the six regulations are at a national level, one region (the EU) is at a supranational level, and one regulation (California) is at a subnational level. At the time of writing this, 17 US states (including California) have either adopted or are in the process of adopting the California ZEV sales standards: Advanced Clean Cars (ACC) program, the ACC II program. The analysis conducted on these regulations identified and described key design elements within each vehicle SSR³. The outcome of the content analysis shaped the SSR Toolkit structure, and the design elements included in the Toolkit that are common across most of the SSRs identified in the review.

Table 1. Six focus regions representing one or more of the three primary SSR types

The intention of the focus regions is to highlight how other regions with existing SSRs approach policy design. Examples of how these regions approached SSR design can be found throughout the Toolkit.

Table 3 provides links to other regions with existing SSRs not included in the focus regions.

Table 3. Existing SSRs in other regions

Many think tanks and Non-Government Organizations (NGOs) have already conducted valuable work comparing and summarizing SSRs. IEA's Global EV Outlook 2024 report provides a summary of EV adoption rates and relevant programs/policies categorized into six regions: China, Europe, India, Japan, US, and the rest of the world. RMI released a Zero Emission Vehicle Policy Factbook that compares SSRs across eight markets that have fully, partially or are yet to utilize supply policies: Australia, Brazil, China, the EU, India, Indonesia, the United States, and South Africa. Finally, the ICCT report, Meeting the Mark: Aligning Regulations and Standards with ZEV Targets, compares ZEV sales targets to supply standards to determine alignment. The SSR Toolkit builds on previous work to provide a detailed guide to SSR design.

Toolkit scope

While the SSR Toolkit encompasses a broad scope of information, there are several aspects outside the scope of this Toolkit. Firstly, while most vehicle SSRs include criteria pollutant standards alongside standards for GHG emissions, FE or ZEV sales, the Toolkit does not focus on the design of these standards. While air quality is an important local public health issue, the express intent of the SSR Toolkit is to assist decision makers in building a SSR that reduces vehicle GHG emissions. As air quality and GHG standards are usually packaged in a single SSR, decision makers are encouraged to consider standards for air quality when building their region's regulation. While the Toolkit does not provide specific discussion around air quality, many of the regulations linked to in the Toolkit include information for creating air quality standards.

Secondly, medium and heavy-duty vehicle (M/HDV) SSRs play an important role in decarbonizing the medium and heavy-duty sector but are not a focus in this Toolkit. While the Toolkit has a limited scope, the information provided here can be applied across other vehicle sectors (i.e. two-wheeler, used vehicle markets, and M/HDVs).

Finally, new vehicle sales of four-wheel passenger vehicles are the primary focus of the Toolkit and much of the discussion relates to these vehicles.

It should be emphasized that toolkit users are encouraged to take the foundational information provided in the Toolkit and adapt it to better fit their region's context.

Why focus on supply-side regulations?

SSRs offer multiple benefits for consumers, industry, governments, the environment, and society. These benefits include reduced total cost of vehicle ownership for consumers, reduced reliance on oil, industry innovation, economic development, improvements in criteria pollutant emissions, and reduced GHG emissions. By fostering innovation in vehicle design and ensuring regulatory compliance through clear enforcement mechanisms, SSRs can drive sustainable growth while addressing critical social, economic, and environmental challenges.

Studies suggest that SSRs present a clear pathway to passenger vehicle electrification. While modeling shows that regions with SSRs are always better off than under a no policy scenario, the effectiveness of the policy (i.e. the proportion of ZEV sales and level of GHG emissions reduction) is dependent on the type and design of the SSR. Modeling policy scenarios in Canada, Axsen et al. found that a ZEV sales standard combined with a vehicle efficiency standard was the most cost effective ($/ton CO₂e) policy package for achieving 100% ZEV sales by 2035⁴. By modeling alternative penalty levels, credit banking periods, and credit values under a ZEV sales standard, Bhardwaj et al. demonstrate the impact of policy design on GHG emissions reduction. The authors found that a SSR with high penalties (CA$10k), that allows banking and allocates one credit per ZEV sale was the most cost-effective ($/ton CO₂e) policy design⁵.

While SSRs are crucial to passenger vehicle electrification, other policies are important in supporting these regulations. Consumer incentives, charging infrastructure regulations and incentives, and renewable energy policies are all vital in supporting the transition to electrification. While these aspects of electrification are outside the scope of this Toolkit, users are encouraged to implement a suite of policies to support SSRs.

Footnotes

¹ Long, Z., Axsen, J., & Kitt, S. (2020). Public support for supply-focused transport policies: Vehicle emissions, low-carbon fuels, and ZEV sales standards in Canada and California. Transportation Research Part A: Policy and Practice, 141, 98–115. https://doi.org/10.1016/j.tra.2020.08.008

² Neuendorf, K. A. (2017). The Content Analysis Guidebook. SAGE.

³ Howlett, M., & Howlett, M. (2019). Designing Public Policies: Principles and Instruments (2nd ed.). Routledge. https://doi.org/10.4324/9781315232003

⁴ Axsen, J., Bhardwaj, C., & Crawford, C. (2022). Comparing policy pathways to achieve 100% zero-emissions vehicle sales by 2035. Transportation Research Part D: Transport and Environment, 112, 103488. https://doi.org/10.1016/j.trd.2022.103488

⁵ Bhardwaj, C., Axsen, J., & McCollum, D. (2022). How to design a zero-emissions vehicle mandate? Simulating impacts on sales, GHG emissions and cost-effectiveness using the AUtomaker-Consumer Model (AUM). Transport Policy, 117, 152–168. https://doi.org/10.1016/j.tranpol.2021.12.012