(This updates earlier post.)
The National Highway Traffic Safety Administration (NHTSA)—the agency responsible for CAFE standards—has proposed reforming the structure of the corporate average fuel economy (CAFE) program for light trucks and establishing marginally higher CAFE standards for model year (MY) 2008-2011 light trucks.
The agency anticipates that the higher standards over those four years, if adopted, could reduce consumption by an aggregate 10 billion barrels, or by about 2% of projected total (car and truck) light-duty fuel consumption.
During a transition period of MYs 2008-2010, manufacturers may comply with CAFE standards established under the reformed structure (Reformed CAFE) or with standards established in the traditional way (Unreformed CAFE).
For MY 2011, all manufacturers would be required to comply with a Reformed CAFE standard, which is based on vehicle size. This segmentation by size is the major structural change to Reformed CAFE.
Under Reformed CAFE, fuel economy standards are based on the vehicle’s footprint: the product of wheelbase by track width. (Not by weight—more on this below.)
This footprint is the basis for segmentation into six categories, each representing a different range of footprint. A target level of average fuel economy is proposed for each footprint category, with smaller footprint light trucks expected to achieve more fuel economy and larger ones, less.
Each manufacturer would still be required to comply with a single overall average fuel economy level for each model year of production.
|Proposed Unreformed CAFE Standards for Light Trucks|
|2007 (current)||22.2 mpg|
NHTSA is proposing the Unreformed standards for MYs 2008-2010 “with particular regard to the capabilities of and impacts on the ‘least capable’ full line manufacturer with a significant share of the market.” The proposed Unreformed CAFE standards are: 22.5 miles per gallon (mpg) for MY 2008, 23.1 mpg for MY 2009, and 23.5 mpg for MY 2010. The current MY 2007 standard for all light trucks is 22.2 mpg.
NHTSA estimates that the slight increase in Unreformed CAFE standards would conserve some 5.4 billion gallons of fuel over those three years—about 1% of anticipated consumption.
It is the Reformed CAFE approach that offers the potential to increase that reduction to 10 billion barrels over four years.
Under Reformed CAFE, each manufacturer’s obligations would be based on target levels of average fuel economy set for vehicles of six different categories, as shown in the table below.
|Proposed Light Truck Reformed CAFE Footprint Categories and Targets|
|Range of footprint (sq.ft)||≤43.0||> 43.0–47.0||> 47.0–52.0||> 52.0–56.5||> 56.5–65.0||> 65.0|
|MY 2008 Targets (mpg)||26.8||25.6||22.3||22.2||20.7||20.4|
|MY 2009 Targets (mpg)||27.4||26.4||23.5||22.7||21.0||21.0|
|MY 2010 Targets (mpg)||27.8||26.4||24.0||22.9||21.6||20.8|
|MY 2011 Targets (mpg)||28.4||27.1||24.5||23.3||21.9||21.3|
The Reformed CAFE standards for those model years would be set at levels intended to ensure that the industry-wide costs of the Reformed standards are roughly equivalent to the industry-wide costs of the Unreformed CAFE standards in those model years.
NHTSA says it opted for using footprint size rather than vehicle weight or vehicle shadow for several reasons, one of them being that vehicle weight could be tailored more easily than size to move vehicles into heavier weight categories with lower CAFE targets.
Weight could be added to a vehicle near the edge of a category with minimal impact on design or performance at relatively low cost. Similarly, vehicle shadow (in a size-based system) could be tailored for the same purpose by the simple addition of bumpers or other vehicle lengthening features.
We believe that vehicle footprint is a better vehicle attribute and an appropriate foundation for reforming the CAFE program to advance energy security and safety. Basing categories on footprint permits grouping of vehicles in similar market segments, thus avoiding grouping light trucks designed to carry large payloads or a large number of passengers together with light trucks designed to carry smaller payloads or a smaller number of passengers.
NHTSA estimates that if complete compliance for all manufacturers with the Reformed CAFE standards would cost approximately $6.2 billion for MYs 2008-2011, compared to the costs they would incur if the standards remained at the MY 2007 level.
The proposed changes are now open for comment through November 22, 2005. NHTSA provided more than the normal 60-day comment period because the complexity of this rulemaking. April 1, 2006 is the statutory deadline for issuing a final rule on the CAFE standard for MY 2008, and extensions of the comment due date will not be possible.
This rulemaking has been in the works for a long time, and reflects assumptions that are out of synch with emerging market realities. Calculations on cost recovery based on fuel savings were based on a gasoline price of around $1.50 per gallon, for example.