A Study on CO₂ Emission Reduction Using Operating Internal Combustion Engine Vehicles (ICEVs) and Electric Vehicles (EVs) for Rental Vehicles, Focusing on South Korea

Abstract

Regarding the goals for achieving carbon neutrality by 2025, the transportation sector is one of the main causes of various environmental burdens, such as greenhouse gas (GHG) emissions and resource depletion, so reducing the environmental impact of the automobile industry is important. Although many countries are conducting numerous studies on the environmental impact of electric vehicles, they are limited to each country’s vehicles and models, and are limited to the production and process stages. In this study, we compared and analyzed the carbon reductions in electric and internal combustion engine vehicles during the operation stage for the most commonly used mid-sized rental vehicles in South Korea. The research results confirmed a reduction effect of approximately 1 MtCO₂-eq per year based on approximately 570,000 vehicles, and, if applied to all passenger vehicles nationwide, an average annual reduction effect of approximately 36 MtCO₂ can be expected. This figure corresponds to a reduction of approximately 30% in domestic transportation sector carbon emissions in 2024. This study is expected to have potential as a strategic indicator to start with, tailorable to the characteristics of each country’s transportation sector’s decarbonization processes.

1. Introduction

The 2050 carbon neutrality scenario is based on the IPCC 1.5 °C Special Report (2018) that suggests the need for carbon neutrality globally by 2050 in order to limit the increase in the global average temperature to 1.5 °C, comparable to pre-industrial levels [1]. The report consists of large possible scenarios. The first scenario is a complete stop of thermal power generation to minimize emissions, and the second scenario involves the active utilization of removal technologies such as CCUS (Carbon Capture Utilization Storage) instead of continuing thermal power generation [2].

As in the above report, efforts are needed to reduce greenhouse gases to achieve carbon neutrality by 2050 through various detailed methods within the two major representative tools [3]. Many manufacturing and industrial sectors are actively working on carbon neutrality, and, among them, the transportation sector is using the distribution of eco-friendly vehicles as a major means of implementation [4].

The spread of eco-friendly vehicles can reduce greenhouse gas emissions by replacing existing internal combustion engine vehicles (ICEVs) [5]. In the case of South Korea, in the “2050 Carbon Neutral Scenario”, jointly announced by relevant ministries in October 2021, it was announced that in order to reduce greenhouse gas emissions in the transportation sector (98 million tons, 13.5% of the total) to less than one-tenth of the 2018 standard, the proportion of electric and hydrogen vehicles will be increased to over 85% by 2050. A more specific goal is included in the “Upward Plan for the 2030 National Greenhouse Gas Reduction Target (NDC)”, announced at the same time, which suggests that by 2030, out of approximately 27 million registered vehicles, the number of electric and hydrogen vehicles will reach 4.5 million (16.7%) [6]. This goal is also reflected in the “National Strategy for Carbon Neutrality and Green Growth and the First National Basic Plan” (2023). Due to the strengthening of environmental regulations in the transportation sector due to the strengthening of responses to the climate crisis, and the expansion of eco-friendly vehicle distribution policies in each country as a result, sales of eco-friendly vehicles are rapidly increasing worldwide [7]. In 2021, global new electric vehicle (EV) sales more than doubled year-on-year to 4.72 million units. While overall sales of finished vehicles, including EVs, showed a weak recovery, increasing 4% year-on-year, EV sales increased 112% year-on-year, accounting for 5.8% of total finished vehicle sales. In 2021, EV sales surged in most major markets, including China, Europe, the United States, and South Korea, and China, in particular, firmly established itself as the largest EV market in terms of sales and growth rate [8].

Recently, companies have been strengthening R&D organization to take into account independent battery development and production, and are developing high-capacity, high-energy-density cells and packs, as well as BMSs (Battery Management Systems) to expand the driving range of EVs [9].

Given the projected growth rates, EVs can reduce transportation-related greenhouse gas (GHG) emissions [10]. Fuel efficiency improvements and the mandatory use of ethanol–gasoline blended fuel can also reduce emissions from ICEVs [11]. Factors such as fuel economy, grid configuration, vehicle choice, and temperature affect the GHG emissions of EVs relative to ICEVs, and success in decarbonizing the transportation sector depends on understanding the combined impacts of these factors [12]. However, while these growth rates are being considered in national strategies, they still present limitations that have not yet been fully assessed in detail from a national perspective, with macro statistics and strategies.

However, our focus is on decarbonization of the transportation sector, and many countries are conducting numerous studies on the environmental impact of electric vehicles [13]. However, these are limited to the national vehicle models of the research subjects. In this study, we compared and analyzed the carbon reduction amount according to the annual actual operation of EVs and ICEVs at the operation stage for domestic rental vehicles.

2. Literature Review

The world’s population is rapidly increasing, and the need for transportation is also increasing at the same rate due to population growth and aging. Existing vehicles, which provide great convenience in transportation, have several disadvantages. For example, fossil fuels used in existing vehicles generate greenhouse gases such as CO₂ and N₂O, which have negative impacts in terms of global warming [14]. This means that major transportation methods in the world, including those in South Korea, are facing two major problems: rising oil prices and increasing carbon emissions [15]. To address these challenges, interest in research on EVs and hybrid electric vehicles (HEVs) technology has been increasing recently [16]. However, while EVs have lower life-cycle GHG emissions in some regions, battery production-based GHG emissions are often controversial [17].

In the United States, decarbonizing the transportation sector has emerged as an important goal for addressing climate change, primarily due to the high GHG emissions from light-duty vehicles [18]. The life-cycle emissions of various transportation modes under average and maximum occupancy scenarios were analyzed, and the effects of mode switching and technological advancements on emissions reductions were quantified. Accordingly, electric transportation is projected to achieve half the GHG emissions of petroleum-fueled transportation by 2023, and to decrease to one-fifth by 2050 [19].

In Australia and New Zealand, a well-to-wheel analysis was used to compare GHG emissions and energy consumption in the automotive market [20]. A vehicle penetration prediction model was proposed to predict future EV penetration and associated emissions under three scenarios with different EV configurations. In this regard, there is a case in which battery electric vehicles (BEVs) were shown to be superior to other types of vehicles in terms of energy consumption in the current electric power configuration in New Zealand and Australia, providing important policy implications for policy decision-making [21].

As vehicle ownership continues to increase in Malaysia, the need for more effective strategies to reduce emissions from the road transport sector has been highlighted [22]. Strategies such as electrification of vehicles and replacement of gasoline with biofuels are being considered, but these strategies have not yet been fully evaluated from an environmental perspective. The study also considered the impact of considering land use changes for biodiesel production in the LCA. It was found that switching from gasoline-fueled ICEVs to EVs could reduce CO₂ emissions from passenger vehicles, two-wheelers, and buses [23]. Finally, strategies such as electrification of vehicles and replacement of gasoline with biofuels are being considered in Malaysia, but these strategies have not yet been fully evaluated from an environmental perspective. There are cases where life cycle assessments have been conducted to compare the CO₂ emissions of different types of powertrains (gasoline, biodiesel, electric) and different types of transport such as passenger vehicles, two-wheelers (motorcycles), and buses at different life cycle stages [24].

In India, the 2070 carbon neutrality target calls for deep decarbonization across all sectors. The introduction of EVs in the road passenger vehicle sector can be a clean alternative option to achieve this target. This study evaluated the penetration of EVs and transport energy demand towards carbon neutrality at the local level [25]. Using a bottom-up energy system optimization model, the impact of EV policies promoting battery and fuel cell technologies on energy consumption and CO₂ emissions was estimated. It was found that CO₂ emissions and air pollution reductions at the local level are difficult to achieve when simple low-carbon transport technologies are used alone [26]. In contrast, the results showed that combining efficient technologies can significantly reduce carbon emissions and air pollution. The modeling assessment of the study found that the application of net-zero carbon technologies by 2070 could reduce total CO₂ emissions from road passenger transport by more than 80% at the local level in India [27].

In the case of the European Union (EU), the GHG reduction target for the mobility sector was set at 37.5% by 2030 compared to the 1990 level, and, to achieve this, it was stated that the share of zero-emission passenger vehicles, mainly in the form of EVs, must be increased [28]. By 2040, the EV inventory is expected to be approximately 73 times larger than in 2020, and the cumulative reduction in use emissions is expected to reach 2.0 gigatons CO₂-eq [29].

In China, the penetration rate of EVs continues to increase. Since EVs are considered as environmentally friendly vehicles with low operating costs, many studies have focused on evaluating the life cycle cost (LCC) and GHG emissions of EVs [30]. This represents driving patterns and parameters such as speed and acceleration that changed over the years. Charging infrastructure and battery pilot use were also included in the evaluation. The results show that the LCC of EVs is about 9% higher than that of ICEVs in the driving cycle in Beijing in 2020. At the same time, the life cycle GHG emissions of EVs are about 29% lower than that of ICEVs. The study results suggest that if the life driving distance is not as long as expected, the LCC gap will be wider and the GHG emission gap will be narrower [31].

In this research path, numerous studies are being conducted on EVs, which are rapidly emerging as an alternative to ICEVs in the transportation sector, to achieve the carbon neutrality goal, and their potential has been proven. However, they are being conducted only according to the specifications and configuration of the vehicles in each country. Therefore, countries that have declared that they will achieve carbon neutrality goals need to conduct research tailored to their individual circumstances.

3. Materials and Methods

3.1. CO₂ Emission Reduction Target

This study aimed to reduce CO₂ emissions from fossil fuels by replacing them with EVs, thereby reducing CO₂ emissions, and further reducing smoke and fine dust to protect citizens’ health. It also aimed to quantitatively measure carbon emissions in the transportation sector as part of the national carbon neutral policy [4].

Following this trend, the ‘Sharing Economy’ and ‘Ripple Effect’ have recently emerged, and, accordingly, awareness of EVs and the purchase intention of consumers are quite high. However, there are still aspects that are difficult for the public to access due to the high price compared to ICEVs.

Selecting a research vehicle that fits the reality of South Korea is key and very important in this study. Accordingly, it was necessary to select the vehicle market that is most widely used to reflect the needs of consumers who are hesitant to purchase and to expand distribution. Accordingly, rental car vehicles, which are the most widely distributed EVs to date, were selected as the subject of the study.

To this end, the overall statistics for domestic rental vehicles, which were the subjects of the study, were identified. Domestic rental vehicles were divided into passenger vehicles (Subcompact, Compact, Mid-Size, Full-Size), multi-purpose vehicles (Subcompact, Compact, Mid-Size), and special vehicles (Subcompact, Compact, Mid-size). Among the types of vehicles, passenger vehicles account for 98.36% of the total, and, among these, mid-sized rental vehicles accounted for the largest proportion at approximately 51.96% of the total [32]. Therefore, this study selected the most commonly used mid-sized passenger car rental for business and commercial purposes in South Korea (

Table 1. Total Rental Vehicle Type Ratio in 2024 (As of 31 December 2024).

By Vehicles Type		Number of Vehicles (Units)	Rate (%)
Passenger Vehicle	Subcompact Vehicle	87,636	7.98
	Compact Vehicle	1041	0.09
	Mid-Size Vehicle	570,890	51.96
	Full-Size Vehicle	421,182	38.33
Van (Minivan) (Multi-Purpose Vehicle)	Subcompact Vehicle	73	0.01
	Compact Vehicle	22	0.00
	Mid-Size Vehicle	17,635	1.60
Specialty Vehicle (Special-Purpose Vehicle)	Subcompact Vehicle	1	0.00
	Compact Vehicle	279	0.03
	Mid-Size Vehicle	1	0.00
Total		1,098,760	100.00

Source: KOREA RENT-A-CAR ASSOCIATION (http://www.krca.or.kr/, accessed on 14 April 2025); Figures calculated based on the actual number of registered vehicles.

).

According to the 2023 automobile mileage statistics of the South Korea Transportation Safety Authority, the average daily mileage of commercial mid-sized rental cars is divided into gasoline, diesel, LPG, and other fuels, and the comprehensive average daily mileage is 65.8 km/vehicle (

Table 2. Average daily mileage of a mid-sized vehicle (Unit: km/Vehicle).

Business (Passenger Vehicle)	Nationwide Standard
Gasoline	49.7
Diesel	61.5
LPG	97.9
Other fuels	63.6
Total	65.8

Source: [Automobile Mileage Statistics], Korea Transportation Safety Authority (https://kosis.kr/statHtml/statHtml.do?orgId=426&tblId=DT_42601_N003&conn_path=I3, accessed on 7 April 2025).

).

The basis for calculating these statistics is not the actual mileage of the base year, but the average mileage from the previous inspection date to the most recent inspection date of the vehicle that received the vehicle inspection in the base year. Gasoline includes leaded and unleaded gasoline, and other fuels include CNG, Diesel and Electricity.

The detailed calculation details are as follows:

(1)

Average daily mileage—mileage divided by the number of days driven;

(2)

Driving distance—distance calculated by subtracting the previous inspection mileage from the most recent inspection;

(3)

Driving days—number of days between the most recent inspection date and the previous inspection date.

Meanwhile, for research comparison, the configuration of internal combustion engines and EVs in mid-sized rental vehicles were chosen with similar specifications [26]. Here, there are several important differences when comparing the fuel efficiency of electric and internal combustion engines.

The first is the difference in fuel efficiency units. Fuel efficiency in internal combustion engines is generally measured in km/L (kilometers per liter)—in other words, how many kilometers a car can drive with 1 L of fuel. In the case of EVs, fuel efficiency is measured in km/kWh (kilometers per kilowatt hour), which indicates how many kilometers a car can drive with 1 kWh of electricity.

The second is the change in fuel efficiency when driving on highways. Internal combustion engines generally tend to have better fuel efficiency on highways. This is because the engine maintains optimal efficiency when driving at a constant speed. On the other hand, EVs often have lower fuel efficiency on highways. This is due to increased air resistance and reduced regenerative braking effects.

As a result, when comparing fuel efficiency, internal combustion engines often have higher fuel efficiency on highways than in the city; for example, they can have around 10–15 km/L. EVs can save energy by utilizing regenerative braking in the city, but this effect can be reduced on the highway, resulting in lower fuel economy. For example, it can drop to 6.5 km/kWh in the city.

All things considered, when comparing economic efficiency, EVs can have lower fuel costs than internal combustion engines, but they can be less efficient on the highway. Internal combustion engines are relatively expensive to fuel, but their fuel economy often improves on the highway. In conclusion, internal combustion engines improve fuel economy on the highway, while EVs are likely to have lower fuel economy due to reduced air resistance and regenerative braking. Due to this nuance in fuel efficiency, this study applied the fuel efficiency of each research vehicle. The configuration comparing the specifications of the two vehicles is summarized in

Table 3. Research subject vehicle specifications.

Classification	Domestic Company A’s ICEV	Domestic Company A’s EV
Overall Length/Width/Height (mm)	4905/1860/1445	4385/1805/1640
Wheelbase (mm)	2850	2700
Battery (Engine) Type	2.0 Gasoline	Lithium-Ion Polymer
Battery Capacity (Displacement)	1999 (cc)	64 (kWh)
(Motor) Maximum Output	168 (ps)	150 (kW) → 200 (ps)
Clearance Capacity (kg)	1415	1760
Fuel Efficiency (Urban/Highway/Combined)	11.5/15.2/13.0 (km/L)	6.0/4.7/5.3 (km/kWh)

.

3.2. CO₂ Emission Reduction Scope and Boundaries

The purpose of this study is to demonstrate that sustainability is essential for the effective operation of commercial rental cars, and that accurate measurement based on actual operation is key. The research method most suitable for these conditions corresponds to the 7-A transport mode among the 7 transport modes according to the “Guidelines for External Business Feasibility Assessment and Reduction Quantity Certification”.

The benefits of this guideline include enabling car rental companies to assess the feasibility of projects and ensure that environmental goals are met, thereby enabling carbon reduction compliance. It provides a reduction certification framework that helps companies meet carbon neutrality goals and international sustainability standards. In addition, the feasibility assessment of target groups can identify potential risks and develop strategies to minimize them. Finally, regulatory compliance enables companies to set feasibility and long-term sustainability goals by complying with environmental and business feasibility criteria required for legal and ethical operation in the industry.

The research target of this study corresponds to 7-A transport mode of 7 transport mode classifications according to the “Guidelines for External Business Feasibility Assessment and Reduction Quantity Certification”. Therefore, for the fossil fuel reduction project methodology, due to introduction of EVs, [07A-004-Ver01] was used. The boundaries of the comparison group are as shown in Figure 1.

3.3. Calculating CO₂ Emissions Reductions

3.3.1. Calculation Formula for CO₂ Emissions from ICEVs

An internal plan was established to replace existing internal combustion engine rental vehicles with electric rental vehicles, and the introduction of 580,000 EVs was assumed. The EVs were considered new vehicles from the date of initial delivery, and the annual expected reduction was calculated based on the cumulative driving distance from the date of introduction to before the installation of the driving recorder [33]. The emissions of ICEVs are calculated by multiplying the driving distance of the replaced or newly introduced EVs with the CO₂ emission factor of the vehicle in the baseline scenario [34]. However, the driving range of the EV being replaced cannot exceed the driving range of the existing ICEV.

The research process was conducted in 4 stages. Step 1 is the CO₂ emission reduction calculation formula-setting stage, Step 2 is the data and factor organization stage, Step 3 is the calculation stage, and Step 4 is the carbon reduction stage based on result production. The carbon reduction amounts of ICEVs and EVs were calculated, respectively. The research flow chart is summarized in Figure 2, and each detailed formula is as follows.

All information in this study was based on ICEVs. Also, the assumption was established to replace existing internal combustion engine rental cars with electric rental cars, based on the premise of introducing EVs. In cases where the distance exceeds the baseline, the baseline emissions are calculated by multiplying the driving distance in the scenario by the emission factor of the baseline vehicle. The driving distance in the baseline scenario applies the average data from at least the past three years. However, if the operation of the vehicle has not exceeded three years or there is a valid reason to demonstrate that the data from the past three years cannot be applied, it may be calculated using the operation record for at least one year. The corresponding output formula can be seen in Equation (1).

The CO₂ emission factor per kilometer for vehicle i in the ICEV scenario is as shown in Equation (1a). In the case of introducing a new EV, the fuel consumption per kilometer (SFCi) for vehicle I in the baseline scenario is determined using programs disclosed by the governing authority. When replacing an existing fossil fuel vehicle with an EV, the fuel consumption per kilometer (SFCi) for vehicle I in the baseline scenario is determined by comparing the calculated value obtained by dividing the fuel consumption (FC_BL,i) of the baseline vehicle I by the driving distance (DD_BL,i) of vehicle I in the baseline scenario, with the value provided by the manufacturer of vehicle I. The lower value is selected. The data used in the calculation applies the average data from at least the past three years. However, if the operation of the vehicle has not exceeded three years, or if there is valid justification demonstrating the inability to use the past three years’ data, the operation record for at least one year is utilized. The relevant output formula is as seen in Equation (2).

Appropriate measurement units and unit conversion factors were applied according to each procedure and formula, but the final emissions were calculated in tons of carbon dioxide equivalent (tCO₂-eq) [35].

$$\begin{gathered} IE\mathrm{y}=\sum _i {EF}_{BL, km,i} \times DDPJ,j,y \\ \mathit{But}, \mathit{DD} PJ,j,y÷ \mathit{DD} BL, i \le 1 \end{gathered}$$

(1)

IE_y—ICEV CO₂ emission amount for year y (tCO₂/yr);

EF_BL,km,i—CO₂ emission factor per kilometer for vehicle i in ICEV scenario (tCO₂/km);

DD_PJ,j,y—driving distance traveled by vehicle j in Year y (km/yr);

DD_BLi—driving distance of vehicle i in the ICEV scenario (km/yr).

$${EF}_{BL,km,i}=\sum _i SF{C}_i \times NC{V}_{BL,i} \times E{F}_{BL,i}\times {IR}^t \times {10}^{-6}$$

(1a)

EF_BL,km,i—CO₂ emission factor per km for vehicle i in the ICEV Scenario;

SFC_i—scenario of fuel consumption per km for vehicle i in the ICEV (kg, L, Nm³/km);

NCV_BL,i—net calorific value of fossil fuel used by ICEV i (MJ/kg, L, Nm³);

EF_BL,i—CO₂ emission factor of fossil fuel used by ICEV i (tCO₂/TJ);

IR^t—technology improvement factor (0.99) for ICEV i in Year t;

t—years of use of baseline vehicle I;

$${SFC}_i = {\displaystyle \frac{{FC}_{BL,i}}{{DD}_{BL,i}}}$$

(2)

SFC_i—scenario of fuel consumption per km for vehicle i in the ICEV (kg, L, Nm³/km)

FC_BL,i—fuel consumption for vehicle i in the ICEV scenario (kg, L, Nm³/year)

DD_BL,i—driving distance of vehicle i in the ICEV scenario (km/year)

3.3.2. Calculation Formula for CO₂ Emissions from EV

The carbon emissions are calculated by multiplying the amount of electricity charged for the EV by the electricity emission factor. The related formula is as in Equation (3).

$${EE}_y={EC}_{PJ,j,y}\times {EF}_{grid}$$

(3)

EE_y—EV CO₂ Emissions in Year y (tCO₂/yr)

EC_PJ,j,y—Amount of Electricity Charged for Vehicle j at Electric Charging Stations in Year y (kWh/yr)

EF_grid—Electricity Emission Factor (tCO₂-eq/MWh)

3.3.3. CO₂ Emissions Reduction Calculation Formula

The CO₂ emission reductions in this methodology are calculated using the formula below. The related formula is as seen in Equation (4).

$${ER}_y= {IE}_y-{EE}_y-{LE}_y$$

(4)

ER_y—CO₂ emissions reduction in year y (tCO₂-eq/yr)

IE_y—ICEV CO₂ emissions in year y (tCO₂-eq/yr)

EE_y—EV CO₂ emissions in year y (tCO₂-eq/yr)

LE_y—leakage emissions in year y (tCO₂-eq/yr)

The baseline Variation Data and Factors for calculating the standard CO₂ emissions are as shown in

Table 4. Baseline Variation Data and factors for calculating the standard CO₂ emissions.

Factors Used in Baseline Vehicle i	Net Calorific Value of Fossil Fuels	Carbon Dioxide Emission Factor of Fossil Fuels	Electricity Emission Factor
Data/Factors	${NCV}_{BL,i}$	${EF}_{BL,i}$	${EF}_{grid}$
Data Units	MJ/L	tCO2-eq/TJ	tCO2-eq/MWh
Data Source	Country-Specific Calorific Value by Fuel	Country-Specific Emission Factor by Fuel	Factor Value
Applied Values	30.3	73.3	0.45941
Data Purpose	Baseline Emission Calculation
Measurement Procedure	Factor Value

, and the Baseline Variation Data and Factors are organized as shown in

Table 5. Baseline Variation Data and Factors.

Data/Arguments	SFCi
Data Units	L/km
Description	Fuel consumption per km of vehicle i in the baseline scenario
Data Source	Measured, vehicle manufacturer, etc.
Applied Values	0.07
Measurement Procedure	Measured value, manufacturer-provided value
Monitoring Cycle	Calculate baseline emission factor
Data Purpose	Calculate baseline emission factor
Other	- In the case of introducing a new electric vehicle, determine using the program disclosed by the relevant agency; - In the case of replacing an existing fossil fuel vehicle with an electric vehicle, determine the power value between the fuel consumption of the baseline vehicle i (FC BL,i) divided by the driving distance of the vehicle i in the baseline scenario (DD BL,i) and the value provided by the manufacturer of the baseline vehicle i
Data/Arguments	FCBLi
Data Units	L/year
Description	Fuel consumption of vehicle i in the baseline scenario
Data Source	Baseline vehicle i
Applied Values	4461.53
Measurement Procedure	Measurement, calculation
Monitoring Cycle	Once upon business registration
Data Purpose	Baseline emission factor calculation
Other	Apply average data for at least the past 3 years, and if the vehicle has not been operated for 3 years or if there is a valid reason for not being able to apply data for the past 3 years, use at least 1 year of driving records
Data/Arguments	DDBL,i
Data Units	km/year
Description	Vehicle i’s mileage in the baseline scenario
Data Source	Baseline vehicle i
Applied Values	65.8
Measurement Procedure	Measurement, calculation
Monitoring Cycle	Once upon registration
Data Purpose	Baseline emission factor calculation
Other	Apply average data for at least the past 3 years, and if the vehicle has not been driven for 3 years or if there is a valid reason why the past 3 years of data cannot be applied, use at least 1 year of driving records
Data/Arguments	NCVBL,i
Data Units	MJ/L
Description	Net calorific value of fossil fuel used in baseline vehicle i
Data Source	National specific calorific value
Applied Values	30.3
Measurement Procedure	Coefficient value
Data Purpose	Calculation of baseline emission factor
Data/Arguments	EFBL,i
Data Units	tCO2/TJ
Description	Description of carbon dioxide emission factor of fossil fuel used in baseline vehicle i
Data Source	National specific emission factor
Applied Values	73.3
Measurement Procedure	Factor value
Data Purpose	Calculation of baseline emission factor
Other	In the absence of national specific emission factor, apply 2006 IPCC Guidelines or site specific emission factor
Data/Arguments	EFgrid
Data Units	tCO2-eq/MWh
Description	Power emission factor
Data Source	National power emission factor
Applied Values	0.45
Measurement Procedure	Coefficient value
Data Purpose	Calculation of Business Emission Factor
Data/Arguments	IR
Description	Technology improvement factor (0.99) of baseline vehicle i in year t
Data Source	CDM AMS-III.C
Applied Values	0.99
Measurement Procedure	Factor value
Data Purpose	Baseline emission factor calculation

.

4. Research Results

4.1. Results of Calculating Expected CO₂ Emission Reductions

4.1.1. Results of Calculating CO₂ Emissions from ICEV

In the basic scenario of this study, the vehicle mileage was calculated using the automobile mileage statistics of the South Korea Transportation Safety Authority. In the base scenario, the carbon dioxide emission factor per km (EF_BL,km,i) of vehicle i can be calculated as in Equation (1). As a result of the study, IE_y was calculated as 0.010763 tCO₂/yr. For EF_BL,km,i, 0.000162472 tCO₂/km was calculated, and DD_PJ,j,y was 65.8 km/yr.

The official fuel efficiency of the reference vehicle, an ICEV, is 13 km/L. Since it is a gasoline vehicle, the reference emission factor was calculated by considering the net calorific value and CO₂ emission factor of the CO₂ emissions trading system. The relevant contents are as follows: Equation (2). When applying the calculation formula to SFC_i, NCV_BL,i, EF_BL,i, IR, and t, the research result EF_BL,km,i is 0.000162472 tCO₂/km.

4.1.2. Results of Calculating CO₂ Emissions from EV

The emissions from EVs were calculated by multiplying the charging power of the replaced EV by the power emission factor. Leakage was not considered, and the related equation and research results are as shown in Equation (3). As a result of the study, EE_y was calculated as 0.005704 tCO₂/yr. For EC_pj,j,y 12.42 kWh/yr was calculated, and EF_gird was 0.45941 tCO₂-eq/MWh.

4.1.3. Results of CO₂ Emission Reduction Amount

The CO₂ emission reduction amount of this methodology is calculated Equation (4). The final calculated CO₂ emissions of ICEV and EV were 0.010763 tCO₂-eq/yr and 0.005704 tCO₂-eq/yr respectively, and there was no leakage. Accordingly, the final carbon reduction difference was calculated as 0.005059 tCO₂-eq/yr.

4.2. Reduction of CO₂ Emissions from Based on Domestic Mid-Sized Rental Vehicles Operation (ICEV and EV)

ICEVs were driven at an average of 65.8 km/day and 24,017 km/year, and 570,890 medium-sized vehicles were driven. It was confirmed that ICEVs generated approximately 2,242,734.14 tons of CO₂, and EVs generated 1,188,490.65 tons of CO₂. Accordingly, the difference in reduction between the two vehicles was confirmed to be 1,054,252.49 tCO₂ (

Table 6. Results of CO₂ emission reduction amounts.

Assortment	Applied Value	Unit
Business–Passenger Vehicle Standard (Daily Driving Distance)	65.8	km/Day
(=Rental vehicle Driving Distance)	24,017.00	km/Year
Number of Vehicles in Operation	570,890.00	Year/Vehicle
ICEV CO2 Emissions	2,242,743.14	tCO2-eq/Year
EV CO2 Emissions	1,188,490.65	tCO2-eq/Year
Expected CO2 Emissions Due to Operation	1,054,252.49	tCO2-eq/Year

).

The research results show that this figure accounts for a significant portion of the country’s greenhouse gas emissions. As of 2021, there are 73 companies with annual greenhouse gas emissions exceeding 1 million tons, and the greenhouse gases emitted by these companies account for 75% of the country’s total emissions. From a government perspective, the figure represents a target of capturing 1 million tons of carbon per year through the development of CCUS technology and large-scale carbon capture demonstration experiments. Also, compared to the carbon absorption of forests, which absorb greenhouse gases in the atmosphere and play a role in lowering carbon dioxide concentrations, the net carbon absorption of the ecosystems of South Korea’s seven national parks in 2021 is equivalent to 1,032,448 tons.

4.3. Comparison of CO₂ Emissions Reductions by Passenger Vehicles Nationwide According to Operation (ICEV and EV)

According to the standards announced by the Korea ON-line e-Procurement System, the working endurance term of domestic mid-size vehicles is 8 years for general vehicles. However, according to the 2025 Public Procurement working endurance term table, the working endurance term of vehicles can be shortened by 1 year if the driving distance exceeds 200,000 km, and by 2 years if the driving distance exceeds 300,000 km.

Extending the results of previous research, we assumed a lifespan of 8 years for ICEVs and assumed the amount of carbon reduction when driving EVs. According to the National Automobile Statistics, as of April 2025, the number of all types of passenger vehicles nationwide whose working endurance terms are expected to expire in 2016 is approximately 17,338,160. Assuming all calculation conditions are the same, the annual carbon reduction when driving an EV was calculated to be approximately 32,018,074 tCO₂-eq.

Based on this, if the annual working endurance term is predicted from 2016 to 2024, an average annual reduction of approximately 36,443,830 tCO₂ is expected. The results are shown in Figure 3. The annual average reduction figure is reported to be approximately 98 million tons of carbon emissions from the domestic transportation sector in 2024, which equates to a carbon reduction of approximately 30%.

The results of this study ultimately suggest that EVs can reduce transportation-related GHG emissions, given the expected annual growth rate of the transportation sector. In addition, emissions from ICEVs can be reduced through improved fuel economy or mandates for ethanol–gasoline blends. Factors such as fuel economy, grid configuration, vehicle selection, and temperature affect the greenhouse gas emissions of EVs compared to ICEVs, and the success of decarbonizing the transportation sector depend on understanding the combined impacts of these factors. EVs have the potential to significantly reduce climate change impacts compared to ICEVs, but this is only possible if the electricity consumed by the vehicle is produced from sources other than fossil fuels. The market entry of BEVs requires consideration of several conflicting aspects. Vehicle manufacturing, grid configuration, high-voltage battery production, and LC driving ranges are key factors that must be considered simultaneously when assessing the environmental impact of the transition to EVs. Electric mobility is considered an effective strategy to reduce greenhouse gas emissions in regions where fossil fuel control is limited and electricity is produced from energy sources.

Accordingly, the current expansion of EV distribution is a mid- to long-term roadmap that aims to distribute 4.2 million EVs and 300,000 hydrogen vehicles by 2030, and a policy to suppress the sale of ICEVs is being promoted. To this end, efforts are being made to adjust subsidy policies and expand charging infrastructure. Accordingly, this paper proposes infrastructure investment and subsidy sectors.

First, in the case of infrastructure investment, a method should be implemented to significantly increase charging stations on highways, parking lots, and apartments through cooperation between the public and private sectors, and to introduce ultra-fast charging technology. Providing special benefits for EVs: Measures to increase purchasing attractiveness, such as highway toll discounts, free use of public parking lots, and limited permission for bus-only lanes, should be implemented first.

In the case of subsidies, some subsidies should be provided for the purchase of used EVs as well as new vehicles to activate the market. In addition, it is necessary to increase the subsidy rate for commercial vehicles such as taxis, trucks, and delivery vehicles to induce a rapid transition.

This is expected to reduce carbon emissions, reduce particulate matter and fine dust emissions, and contribute to improved public health. In addition, it is expected to contribute to improving future carbon neutrality policies by reducing greenhouse gas emissions in the transportation sector among the national carbon neutral policies.

5. Conclusions

In this study, we quantitatively measured and compared the CO₂ reduction amount that occurs when replacing ICEVs with EVs in accordance with the “Guidelines for Feasibility Assessment and Reduction Amount Certification for External Businesses” for greenhouse gas reduction.

This study has clear limitations in that it only assumed the most commonly used medium-sized vehicle and the operating stage. However, as the number of countries declaring carbon neutrality is gradually increasing, it is clear that this study must be conducted because governments around the world are expected to further strengthen the introduction of EVs at the national level every year. In addition, in order to respond to carbon trade barriers such as the EU’s Carbon Border Adjustment Mechanism, there is a limitation in that only comparisons were made in terms of operation, excluding the automobile production and disposal stages that affect greenhouse gas emissions due to the lack of a national LCI DB for electric vehicle batteries, which are currently under development.

In conclusion, it is important to reduce the environmental impact of the automobile industry in the transportation sector, which is one of the main causes of various environmental burdens such as GHG emissions and resource depletion among the carbon neutrality realization goals. Ultimately, carbon neutrality is not limited to major countries such as the United States and the EU, and detailed step-by-step promotion is necessary so that it can be promoted according to the circumstances of each country.

Starting with this study, related countries are expected to implement carbon neutrality goals in other sectors, starting with the transportation sector. Through this, it is expected that fine dust emissions, including carbon emissions, can be reduced, contributing to improving national health. In addition, it is expected that reducing greenhouse gas emissions in the transportation sector among national carbon neutral policies will contribute to improving carbon neutrality policies in the future.