Differing from those traditional vehicle exhaust heat recovery systems which just provided thermal energy directly for cabin warming, integrated Exhaust Energy Recovery (EER) which is researched and developed mainly in recent years aims to convert exhaust thermal energy to mechanical or electric energy for increasing the total thermal efficiency and the total power of powertrain. In the study presented in this paper, an analytic model was built for examining the environmental and economic benefits of integrated EER systems. Then the improvement on the total powertrain efficiency and net reduction of CO2 emissions were investigated, in terms of the average vehicle used in the UK. Results show that, for light duty vehicles fitted with thermal cycle EER system, the cost increase could be paid back in 10.1 years and CO2 emission could be paid back in just 1.9 years, compared to Hybrid Electric Vehicle's (HEV's) 11.9 years and 1.4 years for cost and CO2 emission, respectively. When the annual fuel price increase is considered, the cost pay-back is reduced to 8.1 years for EER vehicles and 8.9 years for HEVs. Higher mileage vehicles will have more obvious advantage for fitting EER system. When doubled annual mileage is considered, EER system can reduce the cost and CO2 emission pay-back times to 2.7 years and 0.6 years, compared to HEV's 8.5 and 2.7 years, respectively. (C) 2013 Elsevier Ltd. All rights reserved.