**1. Introduction**

In 2017, the transportation sector accounted for 28.9% of the total energy consumption in South Korea [1]. Due to a heavy reliance on petroleum products, the transportation sector was the most CO2-emitting sector among all end-use sectors in the country [2]. The South Korean government has implemented various policies for reducing energy consumption and greenhouse gas emissions in the transportation sector. Since the road sector accounted for 79.7% of the total transportation energy consumption in 2017, excluding that of bunkering [3], many policies focus on the road sector in South Korea. As many countries have adopted the Corporate Average Fuel Economy (CAFE) standards, South Korea also implemented CAFE standards in 2008. However, CAFE standards only deal with a tank-to-wheels analysis which is a part of a comprehensive analysis of vehicle energy use and emissions [4], thus restricting the annual average fuel economy (km/L) or greenhouse gas (GHG) emissions (g/km) of automobiles for automakers. To facilitate automakers in selling fuel-efficient cars and satisfying CAFE standards, there is a credit system in the CAFE standards in South Korea. According to this credit system, a sale of one fuel-efficient car can earn multiple credits. For example, the sale of one battery electric vehicle (BEV) is counted as three car sales by calculating the annual average fuel efficiency performance and annual average GHG emission performance. Even the sale of one gasoline vehicle which has a fuel efficiency of more than 23.4 km/L is counted as two car sales. It is worth introducing the U.S. CAFE standards here in which automakers are able to trade credits [5]. For instance, an automaker with a CAFE performance lower than what is required can opt to buy some credits in the credit market (that is, from other automakers). This flexibility in the U.S. CAFE standards allows automakers to lower costs for achieving CAFE standards. U.S. CAFE standards are calculated based on the wheelbase (length) and footprint (area) [6], causing larger cars to be less affected than smaller cars, while the South Korea CAFE standards consider a vehicle's curb weight.

Fuels emit GHG emissions through their life cycle—well-to-wheels process (WtW)—which can be disaggregated into well-to-tank (WtT) (extraction, refining, and transportation) and tank-to-wheels (TtW) (combustion). CAFE standards regulate only TtW emissions. The results of Khan et al.'s [7] WtW study in Pakistan show that TtW emissions accounted for 73–86% of the life cycle of GHG emissions for internal combustion vehicles (ICEVs). Song et al.'s [8] WtW study in Macau showed that for a gasoline vehicle, TtW emissions accounted for 87% of its life-cycle GHG emissions. Jang and Song's [9] WtW study in South Korea showed that TtW emissions accounted for 82.8% and 83.4% of the life cycle GHG emissions for gasoline and diesel vehicles, respectively. Previous studies have found that TtW GHG emissions are a major contributor to life-cycle GHG emissions. Hence, this study focuses on an analysis of TtW GHG emissions and assesses CAFE standards in South Korea using the Global Change Assessment Model (GCAM) with a sensitivity analysis.

#### **2. Current Status of Passenger Cars in South Korea**

As shown in Figure 1, the total number of cars in South Korea has increased rapidly. This increase has primarily been led by sales of passenger cars. Over the last ten years, the number of passenger cars and trucks has increased by 47.2% and 13.5%, with a current total of 19.17 million passenger cars and 3.59 million trucks, while vans sales decreased by 24.9% with a total of 0.81 million vans in 2019. That is, passenger cars will be a crucial target for reducing transportation energy consumption and GHG emissions in the road sector.

**Figure 1.** Number of cars in South Korea.

Figure 2 shows historical trends of the share of passenger cars by engine size and average energy intensity (EI). During 2000–2019, the share of large-sized passenger cars (more than 2000 cc) noticeably increased from 8.6% to 28.5%, while the percentage of small-sized passenger cars (1000 cc~1600 cc) sharply decreased from 49.3% to 21.2%. Considering that the energy intensity of large-sized cars is usually higher than that of small-sized cars [10], this shift in consumer preferences for large-sized cars must have had a negative impact on the overall energy intensity of passenger cars. The increase in average energy intensity from 2.71 MJ/km to 3.37 MJ/km during 2001–2016 (Figure 2) provides empirical evidence of such an impact.

**Figure 2.** Share of passenger cars by engine size and weighted average energy intensity (EI) (source: Ministry of Land, Infrastructure and Transport [11], Korea Transport Institute [12], Korea Energy Economics Institute [13]). Note: MOLIT [11] changed the statistical classification of passenger cars in 2009.

While the shift in consumer preferences for large-sized passenger cars tends to increase energy intensity, the promotion of energy-efficient cars such as BEVs and fuel cell electric vehicles (FCEVs) could lower passenger cars' energy intensity. South Korea has implemented various policies for promoting BEVs, for example, providing a subsidy for buying a BEV. As a result of this policy, for the transportation sector, BEVs' market share in South Korea increased from 0.05% to 1.95% during 2013–2018 (Figure 3). Even though the number of BEVs in 2018 was small, it is expected that BEVs can be a primary technology for improving energy intensity in the transportation sector in the near future.

**Figure 3.** Market share of battery electric vehicles (BEVs) (source: International Energy Agency [14]). Note: Market share means share of new BEV registrations as a percentage of total new passenger car registrations.
