Training held for the working group REC / UNEP GFEI project on the theme FeeBate (compensation - discount) and FEPiT instruments for adopting more sustainable policies in the field of fuel economy

July 4, 2016

The project ‘Stabilizing Greenhouse Gas (GHG) Emissions from Road Transport Through Doubling of Global Vehicle Fuel Economy: Regional Implementation of the Global Fuel Economy Initiative (GFEI)’ is developed in the context of the Global Fuel Economy Initiative (GFEI) which supports actions and planning at the national level to improve automotive fuel economy toward a global doubling of fuel efficiency from light-duty vehicles by 2050. Financial support for implementation of Montenegrin national project activities is provided by the United Nations Environment Programme (UNEP) from the funds of the Global Environment Fund (GEF).

Today's training for the GFEI project work group about use of FeeBate (fee - rebate) and FEPiT instruments for more efficient adopting sustainable policies in the field of fuel economy was held by a Professor of the Faculty of Electrical Engineering, University of Montenegro, prof. PhD. Zoran Miljanic, who has gained relevant experience throughout long-term cooperation with the REC Country Office in Montenegro within implementation of projects in the field of cleaner fuels and cleaner vehicles.

It should be noted that the FeeBate (fee-rebate) system represents fees for inefficient technologies and rebates for efficient vehicles. According to David L. Green, a Professor of Economics at the University of Tennessee, fee - rebate is a fiscal policy to encourage car buyers to prefer to choose a more efficient low-emission vehicle and manufacturers to design them.

• FEES for inefficient vehicles and

• REBATES for efficient vehicles.

Fee-rebate programs can be extremely useful when helping to expand the adoption of cleaner fuel and vehicle technologies. If developed and applied appropriately, government subsidies can accelerate the emergence of new cleaner technologies and help to achieve cost-effectiveness, so that the next generations of vehicles become more easily accessible to public, without government intervention in the market. The International Council on Clean Transportation published a report on best practices in development and application of the FeeBate program.

As for the other instrument - FEPiT, it is a tool for assessing the impact of fuel economy policies (FEPIT) and is based on data collected for a national fuel economy vehicle database, and projections are based on the latest trends in the average fuel economy of all newly registered vehicles (both new and used vehicles) and the structure of the car market.

By using data on registered cars and fuel economy goals, the FEPIT calculates the results of a fuel economy package (and their level of ambition) in terms of the future average fuel economy.

In addition to modeling the level of ambition of potential standards, FEPIT can also be useful in negotiating with manufacturers and vehicle importers, as well as in establishing an affordable economic policy package that can keep long-term goals in place.