Congress voted in the 1970s to introduce Corporate Average Fuel Economy (CAFE) standards for new passenger vehicles. CAFE is the sales-weighted average fuel economy in miles per gallon (mpg) of the vehicles in a manufacturer’s fleet. When federal fuel economy standards were updated in 2010, standards for greenhouse gas emissions were added for the first time. The standards were adopted by the Environmental Protection Agency (EPA) and the National Highway Traffic Safety Administration (NHTSA) with the cooperation of major automakers and the state of California. EPA’s standards govern vehicles’ greenhouse gas emissions and NHTSA’s standards govern vehicles’ fuel economies; the standards were harmonized to produce a target for automakers to meet.
The standards implemented by EPA and NHTSA aim to raise average fuel economy to up to 54.5 mpg for model year 2025, nearly double the 27.5 mpg required before new CAFE standards were adopted in 2010.
Following a mid-term review and draft Technical Assessment Report, EPA issued a final determination on January 12, 2017, that maintained federal fuel economy standards through 2025. The final determination cited the success of automakers in meeting early fuel economy requirements and the seven-year growth in U.S. auto sales as reasons to expect that automakers could affordably continue to meet the standards. The California Air Resources Board concurred with the EPA’s determination in its own midterm review of vehicle standards, finding that automakers were successfully and affordably deploying advanced technologies to meet fuel economy requirements and the state’s Zero-Emission Vehicle program.
In March 2017, the Trump Administration revisited the EPA’s January 2017 decision to finalize light-duty vehicle emissions standards through 2025. EPA will review the financial and technological feasibility of the standards, and if it determines revisions are required, will undertake a formal rule-making. Public comments on the original rule will be reopened through early 2018. Separately, EPA is taking comments on the appropriateness of light-duty vehicle emissions standards for 2021. NHTSA has also begun to consider the next phase of vehicle standards beginning in 2022.
For medium- and heavy-duty vehicles, fuel economy and greenhouse gas standards were first set in 2011 for model years 2014-2018. In August 2016, EPA and NHTSA finalized new Phase 2 fuel economy standards for model years 2021-2027. The Trump Administration has shown interest in revisiting Phase 2 standards for medium- and heavy-duty vehicles. In April 2017, EPA requested a pause in a federal court case (Truck Trailer Manufacturers Association v. EPA) over the Phase 2 standards. In its filing, EPA said it might adjust the standards, resolving the manufacturers’ concerns.
Passenger Cars/Light-Duty Trucks
The passenger vehicle standards finalized in April 2010 cover passenger cars, light-duty trucks, and medium-duty passenger vehicles from model year 2012 to 2016. The standards set a foundation for those set in 2012 for model years 2017 to 2025. The standards are based on the vehicle’s footprint, which is a measure of vehicle size. Footprints are divided into two categories: passenger vehicles and light trucks, which include pickup trucks, vans, and sport utility vehicles.
A mid-term evaluation was required because NHTSA, under its statutory authorities, cannot set standards beyond model year 2021. Thus, standards for model years 2022 through 2025 are considered “augural” – or a prediction – by NHTSA.
As seen in the table, EPA’s greenhouse gas standard requires vehicles to meet a target of 163 grams of carbon dioxide equivalent (CO2e) per mile in model year 2025, equivalent to 54.5 mpg if the automotive industry meets the target through only fuel economy improvements.