The FIA has formally confirmed that the much vaunted “global agreement” on power units has been fully agreed and passed by the World Motor Sport Council.
The agreement, which focuses on reducing costs, guaranteeing supply, convergence of performance and improved engine sound, covers the 2017 to 2020 seasons, and will be implemented in the sporting and technical regulations. As part of the deal the FIA has guaranteed power unit rules stability until 2020.
Reducing costs has been the major thrust of the deal. The FIA says: “Agreement has been reached on a significant reduction in the price of power unit supply to customer teams and a reduction in cost to manufacturers over the coming years.
“In 2017 the power unit price for customer teams will be reduced by €1m per season compared to 2016. From 2018, the annual supply price will be reduced by a further €3m.
“Cost reduction on power units will be driven by changes to the Sporting and Technical regulations in 2017 and 2018, with a progressive reduction of the number of power unit elements per driver per season.”
Regarding the guarantee of supply, the FIA said: “Supply of power units to customer teams will be ensured, as the homologation procedure will include an “obligation to supply” that will be activated in the event of a team facing an absence of supply.”
The most contentious issue has been performance convergence, but the FIA is confident that a way forward has been found.
“The new agreement includes a package of measures aimed at achieving performance convergence. The token system is to be removed from 2017. Additionally, constraints on power unit part weights, dimensions and materials, and on boost pressure will be introduced in 2017 and in 2018.”
Finally attempts are being made to further improve the sound of the engines: “Manufacturers are currently conducting a promising research programme into further improving the sound of the current power units, with the aim of implementation by 2018 at the latest.”
Adam Cooper's F1 Blog 
Lots of words.
Be surprised if there is any real substance to them….
P/u’s become cheaper….hell if you want to use a 2014 unit we’ll even pay for you to take it….
One million per season? That does not seem much given how expensive these engines are.
And the annual price will be reduced by a another 3 million aftter 2018? But fewer engines will be used anyway, so that in itself should lead to a reduction in cost of more than 3 Million? I feel F1 is on a clear path to being something like DTM in a few years…
They can agree on cost reduction and performance convergence til the cows come home; I want to know how they will keep Red Bull from capturing a Mercedes, Honda, or Ferrari engine package next year or beyond?
Technically, neither Mercedes nor Ferrari are required to supply Red Bull because both of those manufacturers are already supplying the maximum number of teams they are allowed to supply (one works and three customers) under the current regulations.
The only manufacturer which could be compelled to supply another team would be Honda – however, why would Red Bull want a power unit that is probably even less competitive than the one they currently use?