Obama Administration Proposes Higher Fuel Economy Standards

Next phase in national program for light-duty vehicles

WASHINGTON -- The U.S. Environmental Protection Agency (EPA) and the U.S. Department of Transportation (DOT) formally unveiled yesterday their joint proposal to set stronger fuel economy and greenhouse gas pollution standards for Model Year 2017-2025 passenger cars and light trucks. Cars, SUVs, minivans and pickup trucks are currently responsible for nearly 60% of U.S. transportation-related petroleum use and greenhouse gas emissions.

When combined with other steps to increase energy efficiency, this proposal will save Americans more than $1.7 trillion at the pump, the Obama administration said, more than $8,000 per vehicle by 2025. These combined actions also will reduce America's dependence on oil by an estimated 12 billion barrels, and, by 2025, reduce oil consumption by 2.2 million barrels per day, it said--enough to offset almost a quarter of the current level of our foreign oil imports.

Taken together, these actions will also slash 6 billion metric tons in greenhouse gas emissions over the life of the programs, the White House said.

The proposed standards alone will slash oil consumption by 4 billion barrels and cut 2 billion metric tons of greenhouse gas pollution over the lifetimes of the vehicles sold in those years, it added.

The proposed program for MY 2017-2025 passenger cars and trucks is expected to require increases in fuel efficiency equivalent to 54.5 miles per gallon (mpg) if all reductions were made through fuel economy improvements. These improvements would save consumers an average of up to $6,600 in fuel costs over the lifetime of a MY 2025 vehicle for a net lifetime savings of up to $4,400 after factoring in related increases in vehicle cost. Overall, the net benefit to society from this rule would total more than $420 billion over the lifetime of the vehicles sold in MY 2017-2025.

This action builds on first phase of the Obama administration's national program (2012-2016), which will raise fuel efficiency equivalent to 35.5 mpg by 2016 and result in an average light vehicle tailpipe CO2 level of 250 grams per mile. These standards are already in effect and saving consumers money at the pump now, the White House said. Combined with 2011 fuel economy standards and the standards in effect for 2012-2016, the  proposal represents the most significant federal action ever taken to reduce greenhouse gas emissions and improve fuel economy.

Taken together, these actions would reduce greenhouse gas emissions by half and result in model year 2025 light-duty vehicles with nearly double the fuel economy of model year 2010 vehicles, it said.

The national policy on fuel economy standards and greenhouse gas emissions created by DOT and EPA provides regulatory certainty and flexibility that reduces the cost of compliance for auto manufacturers while reducing oil consumption and harmful air pollution. By continuing the national program developed for MY 2012-2016 vehicles, EPA and DOT have designed a proposal that allows manufacturers to keep producing a single, national fleet of passenger cars and light trucks that satisfies all federal and California standards. It also ensures that consumers will continue to enjoy a full range of vehicle choices with performance, utility and safety features that meet their individual needs, said the White House.

The standards will rely on technologies that are expected to spur economic growth and create high-quality jobs across the country. Major auto manufacturers are already heavily invested in developing advanced technologies that can significantly reduce fuel use and greenhouse gas emissions beyond the existing model year 2012-2016 standards. In addition, a wide range of technologies are currently available for automakers to meet the new standards, including advanced gasoline engines and transmissions, vehicle weight reduction, lower tire rolling resistance, improvements in aerodynamics, diesel engines, more efficient accessories and improvements in air conditioning systems the administration said.

The standards should also spur manufacturers to increasingly explore electric technologies such as start/stop, hybrids, plug-in hybrids and electric vehicles. The MY 2017-2025 proposal includes a number of incentive programs to encourage early adoption and introduction of "game-changing" advanced technologies, such as hybridiation for pickup trucks.

The proposal released yesterday follows President Obama's announcement in July that the administration and 13 major automakers representing more than 90% of all vehicles sold in the United States have agreed to build on the first phase of the national vehicle program. EPA and DOT worked closely with a broad range of stakeholders to develop the proposal--including manufacturers, the United Auto Workers, the State of California and consumer and environmental groups.

There will be an opportunity for the public to comment on the proposal for 60 days after it is published in the Federal Register. In addition, DOT and EPA plan to hold several public hearings around the country to allow further public input. California plans to issue its proposal for model year 2017-2025 vehicle greenhouse gas standards on December 7 and will finalize its standards in January.

To view NHTSA and EPA's Notice of Proposed Rulemaking, click here.