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MIIT issues CAFC credit trade off and carry over requirements for 2016 and 2017

BEIJING – The Ministry of Industry and Information Technology (MIIT) issued the Notice on the Management of Passenger Vehicle Corporate Average Fuel Consumption (CAFC) for 2016 and 2017 on November 3.

According to the Notice, companies that incurred negative CAFC credits in 2016 can trade off their negative credits with positive CAFC and New Energy Vehicle (NEV) credits or through the transfer of credits with affiliated companies and the purchase of positive NEV credits in accordance with the CAFC+NEV “dual credit” scheme (Parallel Administrative Measures for Passenger Vehicle CAFC and NEV Credits) that was jointly released by MIIT and other commissions and ministries on September 27.

Companies that are unable to trade off their negative CAFC credits incurred in 2016 and 2017 should submit their passenger vehicle production or import adjustment plans to MIIT, such that positive credits incurred in future can trade off their remaining negative credits.

Before negative credits are cleared, new products that fail to meet the requirements of the passenger vehicle fuel consumption assessment method and standard will not be listed on MIIT’s regularly published Road Motor Vehicle Manufacturers and Their Products catalogue.

Passenger vehicle manufacturers can also carry-over their positive CAFC and NEV credits in later years based on the following requirements:

1)  Passenger CAFC credits from 2013 to 2015 are calculated as the product of the difference of CAFC target value and actual value multiplied by passenger vehicle production or import volume. Those with CAFC target values larger than 6.9L/100 km should use 6.9L/100 km as the target value;

2)  Passenger vehicle manufacturers that use positive CAFC credits generated from 2013-2016 to offset their negative credits in 2016 should use the positive carry-over credits carried into 2016. To offset negative credits for 2017, they can use positive credits carried over to 2017. From 2013 to 2016, for each carry-over of positive credits by a year, actual credits that can be used will be multiplied by a factor of 0.8, with carry-over effective for less than three years;

3)  Positive NEV credits from 2016 can be carried over for one year.

The “dual credit” policy will go into effect April 1, 2018, requiring passenger vehicle manufacturers to produce enough NEVs earning credits equivalent to 10 percent of sales in 2019 and 12 percent in 2020, with percentage point requirements for 2021 and beyond to be decided at a later date.

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