Saturday, April 3, 2010

DOT-EPA Fuel Economy Rules - A Summary

On April 1, 2010, the U.S. Department of Transportation and EPA jointly announced new national standards for automotive fuel efficiency and greenhouse gas reductions. Here's a summary.

Vehicles Covered
Passenger cars and light trucks, model years 2012 onward.

New Standard
  • Starting with MY 2012, improve fleet-wide fuel efficiency and lower greenhouse gas emissions about 5% each year.
  • By MY 2016, fleet fuel economy should be 34.1 mpg without credits for air-conditioning improvements, as required by DOT's National Highway Transportation Safety Administration rules.
  • By MY 2016, manufacturers must achieve a combined average vehicle emission level of 250 grams of carbon dioxide per mile.
Potential Costs
Building cars and light trucks that achieve the standard will cost carmakers an extra $52 billion for MY 2012 through 2016.

Potential Savings

  • $3,000 in lower fuel costs for each buyer of a covered vehicle, over that vehicle's life.
  • Nationally, 1.8 billion barrels of oil and nearly 1 billion tons of greenhouse gases over the lives of covered vehicles.
Why the Executive Branch of the Government Loves the New Standard
  • The savings.
  • Realizing one of the Obama Administration's first major directives.
  • Clearer rules for all automakers, instead of three standards (DOT, EPA, and a state standard).
Why the Legislative Branch of the Government Isn't Too Thrilled
Some senators say the rules could hurt the economy, and want to curb EPA action.

Who Else Hates It
The American Petroleum Institute.

Who Else Loves It
Canada. On the same day as the U.S. action, Environment Canada released proposed regulations to reduce greenhouse gas emissions from new vehicles and which would harmonize with those of the U.S. starting with MY 2011.

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