News from Notch Consulting, Inc.

April 1, 2009

Obama Administration Boosts CAFE Standards

Filed under: General — Notch @ 12:19 am

On March 27, the Department of Transportation announced that fuel economy standards will be increased in the United States for the first time since they were established in 1975. Under the new rules, which are scheduled to be released this week, fuel economy standards for passenger cars will be increased to 30.3 miles per gallon (mpg) from the current 27.5 mpg, while standards for light trucks would rise to 24.1 mpg from 23.1 mpg.

The new standards only apply to model year 2011 vehicles, thus differing from those proposed (but not implemented) by the Bush administration, whose proposal also included standards for 2011-2015. However, the new rules are considered a first step toward Congress’s mandate that automakers reach 35 miles per gallon by 2020.

The new standard for passenger cars is lower than the 31.2 mpg that the previous administration had proposed. With regard to future standards, the Obama administration has requested that DOT undertake a more thorough review of future standards, including a forthcoming report on fuel economy from the National Academy of Sciences that was required by the 2007 Energy Independence and Security Act, which had also required the more stringent fuel economy rules.

According to US News and World Report, another test for the administration will come in May, “when it’s thought that the administration will make a decision on whether to allow California and 13 other states to enact laws to reduce carbon emissions. Those laws would cut new-vehicle emissions by 30 percent by 2016. In one of his first moves in office, Obama issued a directive ordering the EPA to re-examine the Bush administration’s rejection of the states’ bid—a worrying sign for automakers.”

The National Highway Traffic Safety Administration’s Corporate Average Fuel Economy Standards are available here.

Tire Business on the new standards (subscription required)

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