Life Cycle Based CO2 Emission Credits: Options for Improving the Efficiency and Effectiveness of Current Tailpipe Emissions Regulation in the Automotive Industry

The current focus on the use phase in automotive carbon dioxide (CO2) legislation bares a risk of unintended consequences as often reductions in the use phase come along with increasing CO2 emissions in other life cycle (LC) phases. This study presents voluntary policy options in form of LC‐based CO2 emission credits. They were developed by desk research considering existing applications of LCA in practice (e.g., environmental reports) and feedback obtained in a structured stakeholder dialogue. A variety of credit options were identified, including rather simple ones based on life cycle thinking (LCT) and more advanced options which rely on quantitative LCA: LCT options that reward innovations leading to CO2 reductions, for example, in the production phase. LCA‐based options reward CO2 reductions along the LC (credits for an International Organization for Standardization [ISO] 14044 conforming externally reviewed LCA showing a continuous improvement) or reductions of other environmental impacts. It was shown that the credit options can be implemented throughout a simplified and robust methodology, for example, with defined rules for conducting the LCA based on international standards and established industry practice, and for calculating the credits (e.g., a credit of 1 gram [g] of CO2/km [kilometer] for savings of 10 g of CO2/km). Voluntary credit options as a complementary modality to the current automotive tailpipe‐based CO2 regulations would help to improve its efficiency and effectiveness and support and reward efforts on achieving real net CO2 emission reductions. The credit options were developed with a first focus on CO2 and automotive industry, but can generally be transferred to other environmental impacts and sectors as well.