**3. CAFE Standards in South Korea and the Objective of this Study**

In South Korea, the implementation of CAFE standards is based on the Energy Use Rationalization Act [15]. During the initial period of the implementation of the standards (2008–2011), the target was to achieve 12.4 km/L for mini and small-sized cars and 9.6 km/L for medium and large cars by 2011. During the second period (2012–2015), no specific targets for the types of cars were given and the overall target was to achieve 17 km/L or 140 g/km by 2015. During the current period (2016–2020), the target is to achieve 24.3 km/L or 97 g/km by 2020. A new target of achieving 28.1 km/L or 84 g/km by 2030 [16] has also been announced. Under the current CAFE standards, the performance and standards of annual average fuel efficiency are calculated as [17] (see Supplementary Materials).

$$f = \frac{N}{\sum\_{i=1}^{N} \frac{q\_i}{f\_i}} \tag{1}$$

$$f^s = \frac{N}{\sum\_{i=1}^{N} \frac{q\_i}{f\_i^s}} \tag{2}$$

where

*f*: average fuel efficiency performance,

*fs* : average fuel efficiency standard,

*N*: total sales of cars,

*i*: car model *i*,

*qi*: sales of car model *i*,

*fi*: fuel efficiency performance of car model *i*,

*fs <sup>i</sup>* : fuel efficiency standard of car model *i*.

$$f\_i^s = \begin{cases} \alpha + \beta m\_i & \text{if } m\_i > 1070 \text{ kg} \\ \delta & \text{if } m\_i \le 1070 \text{ kg} \end{cases} \tag{3}$$

where

α, β, and δ: given parameters,

*mi*: the curb weight of car model *i*.

Fuel efficiency standard of car model *i* is directly given as δ regardless of its curb weight if the curb weight of model *i* is less than 1070 kg and the performance and standard of annual average GHG emissions is calculated as

$$\varepsilon = \frac{\sum\_{i=1}^{N} \varepsilon\_i q\_i}{N} \tag{4}$$

$$c^s = \frac{\sum\_{i=1}^{N} c\_i^s q\_i}{N} \tag{5}$$

where *e* is average GHG emission performance, *es* is the average GHG emission standard, *ei* denotes the GHG emission performance of car model *i*, and *e<sup>s</sup> <sup>i</sup>* denotes the GHG emission standard of car model *i*, which is calculated as

$$\epsilon\_i^s = \begin{cases} \alpha' + \beta'(m - w) & \text{if } m > 1070 \text{ kg} \\ \delta' & \text{if } m \le 1070 \text{ kg} \end{cases} \tag{6}$$

where *w* is an additionally given parameter compared to the calculation of fuel efficiency standards. Until 2011, fuel efficiency was regulated by Federal Test Procedure-75 (FTP-75), a driving test known

as the city driving test. Since 2012, fuel efficiency is regulated in a combined mode considering both city driving and highway driving tests. Under current CAFE standards, the sale of one BEV or one FCEV is counted as three car sales by calculating the annual average fuel efficiency performance and annual average GHG emission performance. For calculating the average GHG emission performance of BEVs or FCEVs, *ei* is counted as zero.

Figure 4 shows historical fuel efficiency and carbon emissions by passenger cars with their CAFE standards. In Figure 4, neither fuel efficiency nor carbon emissions show much improvement during 2013–2018. Considering these unfavorable historical trends in passenger cars' fuel efficiency and carbon emissions, it would be meaningful to assess CAFE standards.

**Figure 4.** Observed versus Corporate Average Fuel Economy (CAFE) standards in terms of fuel efficiency and carbon emissions in the passenger car sector (source: Korea Energy Agency [17]).
