EPA, NHTSA Plan 54.5 MPG Fuel Economy and GHG Standards in 2025; California, Auto Manufacturers Support Plan

August 1, 2011

The Environmental Protection Agency (EPA) and the National Highway Transportation Safety Administration (NHTSA) issued a Supplemental Notice of Intent (NOI) on July 29, 2011, announcing plans to require vehicles to achieve an average 54.5 miles per gallon (mpg), or 163 grams per mile of CO2, on a fleet-wide basis in model year (MY) 2025. (76 Fed. Reg. 48,758). The standards, which would apply to model year 2017-2025 light duty vehicles, are projected to reduce greenhouse gas emissions by approximately two billion metric tons and save four billion barrels of oil over the lifetime of MY 2017-2025 vehicles.

The announcement was accompanied by letters of support from the state of California, which has the authority to set more stringent air pollution standards for vehicles, and auto manufacturers. California commits to accept the final standards, if those standards are substantially the same as outlined in the NOI, as compliance with its own standards. Automakers similarly commit not to challenge the final standards. A key element of the program as described in the NOI is a midterm evaluation of the MY 2017-2025 standards by April of 2018, to determine whether the standards set for MY 2022-2025 would continue to be appropriate based on a comprehensive review of the state of technological development and other factors.

EPA and NHTSA would work in close coordination with the California Air Resources Board (ARB) on the mid-term evaluation. In its letter of support for the NOI, ARB commits to fully participate in the mid-term evaluation, but reserves the right to “contest changes to the standards taken in response to the mid term evaluation,” indicating that California could continue forward with more stringent state standards if the federal standards were weakened in response to the review. 

California has unique authority under the Clean Air Act to seek a waiver to implement more stringent air pollution standards for motor vehicles, and EPA granted California a waiver for GHG regulations for MY 2009-2016 light duty vehicles on July 8, 2009. (74 Fed. Reg. 32,744). At the same time California worked with EPA and NHTSA to develop a single nationwide federal standard for MY 2012-2016, and subsequently accepted the federal standards that were finalized May 7, 2010 (Joint Light-Duty Vehicle GHG Standards and Corporate Average Fuel Economy Standards, 75 Fed. Reg. 25,324).

In an article in E&E News, ARB Chair Mary Nichols was quoted as saying that with the midterm review, "everybody has sort of left themselves an out." With regards to the midterm evaluation,

"If California looks at it differently and decides that we feel there's compelling need to do that, we can do something differently," Nichols said. "We have the right to do that." Nichols added that California would still have to obtain a waiver to set its own standards after 2018, and she and Brown noted that the waiver might be accepted or rejected depending on the politics at the time. (Calif. Argues New Obama Plan Won't Interfere with State Effort for Cleaner Cars , E&E News PM (subscription only), July 29, 2011).

As with the MY 2012-2016 standards, both the CO2 and CAFE standards are tiered based on the size of the vehicle’s footprint. Manufacturers are required to achieve the fleet-wide average based on the production-weighted average emissions of each model in their fleets. Standards become more stringent each model year from 2017 through 2025.

The agencies project that these standards could be met with improvements in conventional gasoline and hybrid vehicle technologies, and increased market share of more advanced technologies. The NOI announces program elements to promote deployment of these advanced technologies, including an incentive multiplier for electric vehicles, plug-in hybrid electric vehicles, and fuel cell vehicles, and credits for hybrid pickup trucks, efficient air conditioning, and off-cycle technologies. As an additional incentive, electric and fuel-cell vehicles would be assigned a 0 miles-per-gram compliance value until at least MY 2021.

The agencies expect to issue a formal proposed rule for the MY 2017-2025 standards by September 28, 2011, and a final rule by July 31, 2012. 

More information: Georgetown Climate Center summarized EPA’s regulation of greenhouse gases in its brief “What States Need to Know About EPA Regulation of Greenhouse Gas Emissions.”