California and Federal Government Agree to New Vehicle Standards

On May 19, 2009, President Obama announced that new national fuel standards will be set through a joint rulemaking process between the U.S. Environmental Protection Agency (EPA) and the U.S. Department of Transportation (DOT). This announcement accompanied an agreement between the state of California and automakers regarding California’s 2005 request for a waiver from the EPA to set a state vehicle standard stricter than the current federal fuel economy standard, pursuant to a special provision of the Clean Air Act. If the waiver were approved, 14 other states and the District of Columbia also intend to adopt the California standard.

The new federal standards will move all states toward the standards set by California. By 2016, the federal standard will achieve the same fuel economy improvement as the California standard would have—35.5mpg—and will also include a greenhouse gas emission limit per vehicle. Although the announcement does not specifically grant California a waiver to set its own standards, California has agreed to conform to new federal fuel economy standards from 2012 to 2016, if it receives a waiver to set its own vehicle standards after 2016. Under this agreement, automakers have also agreed to drop lawsuits against California’s proposed vehicle standard.

California Press Release
White House Press Release