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Aspects of the New CAFE Legislation

Projection of average new fleet fuel economy of the new CAFE provisions compared to existing fuel economy regulations in the US, China and Japan (solid lines) and the likely effect on fuel economy of California AB1493 GHG regulations and the projected path of EU carbon restrictions (dotted lines). Click to enlarge.

With the Senate approving the energy bill (earlier post), the likelihood of the CAFE provisions in the bill emerging from re-consideration by the House and subsequent signing into law by President Bush seems high.

In addition to setting an attribute-based combined car/light-duty truck new fleet average fuel economy requirement of 35 mpg by 2020 and establishing a credit-trading mechanism, the bill also begins the process of the development of a fuel economy standard for medium- and heavy-duty on-road trucks.

Specific provisions of the language include:

  • Separate fuel economy standards for passenger automobiles and light-duty trucks beginning in MY 2011, and culminating in a combined average new fleet fuel economy of 35 mpg by 2020. Standards are to be based on one or more vehicle attributes related to fuel economy and expressed in the form of a mathematical function.

  • New fleet fuel economy for MY 2021-2030 are to be “the maximum feasible”.

  • Automakers must meet a minimum standard of 27.5 mpg or 92% of the average fuel economy projected for the new fleet in a given model year, whichever is greater.

  • Requires a study by the National Academy of Sciences on the fuel efficiency of commercial medium- and heavy-duty on-road vehicles to determine appropriate test procedures and methodologies for measuring the fuel efficiency of such vehicles; devise an appropriate metric for measuring and expressing their fuel efficiency performance, with consideration for applications and duty cycles; determine the range of factors that affect on-highway fuel efficiency 

  • Two years after the completion of the medium- and heavy-duty vehicle study, the Department of Transportation is to determine how to implement a medium- and heavy-duty fuel efficiency improvement program, including the adoption of fuel economy standards.

  • Those new fuel medium- and heavy-duty fuel economy standards must provide at least four full model years of regulatory lead time and 3 full model years of regulatory stability.

  • A credit trading program among automakers to allows those whose automobiles exceed the average fuel economy standards to sell credits to manufacturers failing to meet the standard. An automaker can also transfer credits between compliance categories within its own fleet. (Compliance categories are: (a) Passenger cars manufactured domestically; (b) Passenger cars not manufactured domestically; and (c) light-duty trucks.) Maximum increases in any compliance category via transferred credits is 1.0 mpg for MY 2011-2013; 1.5 mpg for MY 2014-2017; and 2.0 mpg for MY 2018 and after.

  • Fuel economy labels on new vehicles will reflect greenhouse gas emissions as well.

  • A new series of reports from the National Academy of Sciences evaluating vehicle fuel economy standards.

  • Extension of the flexible fuel vehicle credit program. For each model year through 2019 for each category of automobile, automakers may attribute an  increase in average fuel economy for dual-fueled vehicles. The maximum increases are: (a) 1.2 mpg for MY 1993-2014; (b) 1.0 mpg for MY 2015; (c) 0.8 mpg for MY 2016; (d) 0.6 mpg for MY 2017; (e) 0.4 mpg for MY 2018; and (f) 0.2 mpg for MY 2019.

Gasoline consumption in the US, 1945-2006. Click to enlarge.

The overall success of the CAFE regulations in reducing fuel consumption will be affected by the growth in the fleet and vehicle miles traveled. Despite the triple hammer during the 1970s of the OPEC oil embargo, the enactment of the original CAFE regulations mandating a 2x improvement in fuel economy over ten years, and the oil supply and price crisis precipitated by the Iranian revolution, gasoline consumption in the US was back up to the pre-OPEC embargo level by 1984, and has mainly climbed steadily since. (See chart at right.)

Indexed view of fuel economy, fleet consumption, growth of fleet and vehicle miles travelled. Click to enlarge. Source: FHWA Highway Statistics 2005

That ongoing increase in consumption has been driven by the growth of the fleet, by the increase in vehicle miles traveled (in part augmented by the “rebound effect” of better fuel economy), and by a predilection for manifesting ongoing improvement in technical efficiency in size and performance, rather than fuel economy improvements. (Earlier post.)

(The rebound effect (Jevons or Khazzoum-Brookes postulate) suggests that improvements in energy efficiency can work to increase, rather than decrease energy consumption, as the improvements encourage more use. E.g., better fuel economy encourages more driving.)

ACEEE estimates of reductions in oil consumption resulting form the new CAFE regulations. Click to enlarge.

The American Council for an Energy Efficient Economy (ACEEE) estimates that the new light-duty vehicle CAFE standards will result in a reduction in consumption of 1.03 million barrels of oil per day by 2020; 1.86 million barrels per day by 2025; and 2.4 million barrels of oil per day by 2030.



I think your interpretation of the rebound effect is not quite correct. The rebound effect suggests that some of the gains in efficiency will be offset by more usage -- but not so much so that total consumption increases.

For example, going from 20 MPG to 40 MPG might result in an increase of number of miles driven by 50% -- but that's still a reduction in total gasoline consumed, not net neutral or an increase as the writeup suggests ("The rebound effect (Jevons or Khazzoum-Brookes postulate) suggests that improvements in energy efficiency can work to increase, rather than decrease energy consumption").

Improving efficiency by 100% in per-gallon terms won't cut gasoline consumption by 50%; it will be something less than 50% -- but it will be a cut. That's my understanding anyway...

Rebound Effect is Naive

It would make sense if the cost of gasoline was the constraining factor in miles driven. However, we know that putting gas in the tank is still relatively cheap compared to registration taxes, insurance, depreciation, and maintenance. Not to mention the fact that people's time has a value and that the average American is already spending an hour a day in the car.


the bill also begins the process of the development of a fuel economy standard for medium- and heavy-duty on-road trucks.

I suppose future iterations will involve the intent to initialize the beginning of the process of development of fuel economy standards for medium- and heavy-duty on-road trucks at some unknown point in the distant future...


So this legistlation still includes:
1. A 4% mileage reduction loophole for flexfuel vehicles
2. A seperate class for cars and trucks
3. A seperate class for domestic and import
4. The regulating agency will not be the EPA, but instead DOT.
5. Absolutely nothing will happen until 4 years from now

Is that really worth all the pork we're tossing at this bill.

Especially since it now lacks the gutted legistlation related to PHEVs, Renewable Electricity, and removing of Oil Subsidies.


Oh yeah, and of course, it takes about 20 years for a car fleet to switch over to a higher mileage.

So even in the 13 years it takes for this bill to take effect

We'll have to wait till about 35 years before it actually means our cumulative fleet average goes down.



I agree, this bill is totally irrelevant in regard of what's coming. Oil price will skyrocket in 2009/2012 because of inadquate investment in oil industry to keep pace with the demand, forcing car manufacturers to offer much better fuel efficiency that this pale and emasculated bill. Even Californian proposal won't be adequate. A gaz price at 5/6 $US by 2012 is right on track.

World Oil production will be flat between 2011 and 2025 then will decline inexorably.

if you are not convinced read the folowing link



The credit trading makes me nervous. One of our problems now is that with the two categories, automakers have every reason to prefer small SUVs over more efficient station wagons. With this, it seems that this may get even worse. Now, they can use small SUVs not only to decrease their truck CAFE, but also to lower their car CAFE. For CAFE to work, there needs to be ONE category.


I can see the rebound effect kicking in a cople of ways... If the cost of fuel does not rise .
More people may be encouraged to buy the 'cleaner cars' which could encourage production, maintainance and repair tyres, oils, paint etc and the equipment and facilities. So will in my opinion be quite expansionary.
More Klm's travelled cheaper transport costs will encourage trade in often not so freindly consumer products enabling some more marginal goods to market. This is a reflection of the previous years of domestic and international consumption over the last centuries.
The legislation does support the lowest common technology read (maximum feasible) while encouraging those who exceed the benchmark to sell credits to under performers. Albeit with the assistance of emissions labelling for those who care about such. My guess is that these vehicles will be cheaper to purchase and the labelling will not be easily understood.
Better to legislate against vehicles that do not meet the benchmark, unless they fall into some exemptions for another (special) reason ie overweight body or panel in offroad , dirt road or fuel quality or lack of advanced servicing facility as a real dissincentive and maybe those can be sold or sent as 'aid' to he third world as per the present practice.
Remember a sentance ago these vehicles were headed for the U.S. domestic market.
Another constructive approach would be to support or reward car makers to develop other carbon offsetting technologies wich surely the innovative R&D departments will come acoss but are currently not core buisness.
These R&D departments should (in the model we need to see) be well placed in subject, resources and acces to development engineers to be leaders in carbon ofsett technology ie. my hobby horse wind generation.
Many auto makers have or can acess wind tunnels, have staff cognicent of such matters, costing and estimates etc.
Proper recognition possibly through legislation should have a part to play here.

Lou Grinzo

What a sad, pathetic joke of a bill. As someone observed in a comment over on The Cost of Energy (my site), why do the car companies think they'll be able to sell ANY vehicles in 2020 that get less than 35 miles per gallon?

The rise in oil prices and the coming electrification of vehicles will make this legislation laughably obsolete in just a few years.

Harvey D

Dont forget that Mercedes and BMW sell a very large number of gas/diesel guzzlers in Europe where gas & diesel have been selling for $6+/gallon for many years.

It would probably require more than $7/gallon to break the addiction and our love affair with 3+ tonnes vehicles.

A progressive carbon tax of(4 or 5 cents/gal/month for the next 120 months) may eventually put a dent into our madness.


With technology finally available to make diesel engines just as clean as gasoline engines, expect a huge increase in sales of diesel-powered cars over the next 5-8 years in North America. In fact, I wouldn't be surprised by 2011 that the entire Honda vehicle lineup will offer from a 1.4-liter turbodiesel (Honda Fit/Jazz) all the way up to a 3.4-liter V-6 turbodiesel (Honda Pilot/Acura MDX/Honda Ridgeline).

In fact, I expect GM to offer far more diesel-powered vehicles over the next eight years, especially the entire SUV and light pickup lines.


Yeap, lots of diesel coming up.

Eventually we'll get turbocharged HCCI gasoline engines also.

One thing to consider though.
Would a Feebate approach be more appropriate than CAFE?

What a dynamic car tax-and-rebate program (Feebate) does is charge a fee to gas guzzlers, and then rebate those dollars to gas sippers.

Sends a lot more potent price signal to people when they choose to buy a car, and it's a lot more effective than a gasoline-tax, since people actually shape their purchasing habits on it more.

(Since you really don't have much choice on whether or not you buy gasoline. A feebate on the other hand gives you a big degree of market choice.)


Well as an agoraphobe I find it deeply disturving that I understand whats going on better then you...

1 Rebound is the result of very obvious factors.
A. Every weekemd millions relax by finding an interesting place to go and going there. The better fuel econ instantly opens up far more choises.. NEW choices that they will pick because new places are fun and because everyone in the universe lives just a bit too far from someplace they realy wana go.
B. When milage is the result of a smaller car people take two cars to go on vacations. They also take more trips to the store.
C. When your commute car gets better econ... you live farther from work because most times the farther from work the cheaper the home and cost of living. For us if we had lived 20 miles from work the home would have cost 12000 a month. 40 miles out it was still 6000 a month. We instead pay 1800 a month or so AND that for a fixed rate;/
D. when trucks are weaker and lighter they carry less.. so companies have to own more of them and 2-3 21 mpg trucks cant replace one 13 mpg truck without using alot more fuel driving alot more miles costing more in every way and being a total nightmare to deal with.

2 DRIVING dans and car fans and companies needing work trucks pay most all the bills... For congress this is a deadly catch 22. The car industries both makers and aftermarket and everything else car related are ALL massive and powerful and massive sources of tax revenue...And now you know why hydrogen and the 3500 ln volt and the ethanol loopholr and push exist.

I cant qait to see how much falls apart when this finaly does hit the fan. And the real fun is that no matter what happens at this point its truely going to go beyond interesting times into legend.

I wonder if they will come up with a coo, name for it.. after all dark ages is already taken and so are alot of cool names... Rise of the lard? The era of the botox buda... The drive through empire.... ooo I like that'/


Personally, I think by 2025-2030 the average family car will no longer by powered by gasoline engines--they'll either by powered by even-cleaner diesel engines, fuel cell power or batteries using carbon-nanotube supercapacitors. In fact, by 2030 the average car will actually end up being physically smaller than today's automobiles since improved fuel cells and supercapacitor battery packs will eliminate the space-wasting engine compartment needed with internal combustion engines.


Nancy Pelosi recently appeared on some damn newscast interview and reminded me of Barbara Bush. Both ladies have a 'glazed' look about their eyes that bely their confidence in Speaker Pelosi's case, increased CAFE standards, and in Ms Bush's case, being married to George Sr and whatever he was up to at the time.

For all the posts I've written on this forum about the importance of reforming development patterns so that we may increase our ability to walk, bicycle and take mass transit wherever, most posters still look for a whiz-bang techno-fix super-duper car and someplace far away from their immediate environs less degraded to drive to.

I'm sorry to read that PHEV provisions are not in the bill. Leave it to GM and corporat america to put profit before all else.


You hate fuel cells not because they wont work but because they will work too well.

You hate the idea of a big car going 450 miles on 15 bucks of fuel.

Because when it happens its the end of your last chance to tear down this world and make it yours.



Hydrogen will not be a solution to our energy and pollution problem in the years to come. The well to wheel efficient is too low and would result in doubling our energy consumption for the same miles covered , not exactly what we want. The cost of the infrastructure is beyond what one can imagine, the technology of the fuel cell as well as the storage is still decades away from commercially available product (if ever). Plug in and electric car use an existing infrastructure and that;s a killing argument. The future will be : 25% improvement in efficiency (and smaller cars even if you don't like it), 25% less miles (through carpool, better organisation of work time, working online), 25% Coal to liquid, 25% Biomass to liquid, 25% oil. So total 125% which give us so margin to integrate the fact that we won't be successful on all this.



A. People go to many far away places regardless of their fuel economy. Those with more money are not swayed and the few people I know with less money are not swayed either by their consumption (someone making 1/2 as much per year as me has a vehicle with ~35% of the fuel economy and typically travels 100's of miles every month for little mini- weekend getaways). The time to travel and spending money at the destination has a bigger impact. Unless the more efficient cars are artificially limited to a low top speed (as in sub 60mph) I don't see people suddenly jumping in their cars for longer drives.
B. maybe...if they have a large family. Then again couples without kids and empty nesters (probably a larger percentage than those with kids at home) are more likely to have the financial capability for these weekend jaunts and they won't carry as much "stuff" as those with kids.
C. No, you are ignoring time to drive and many of those further away places to live have shopping nearby. Only people I know who live extremely far away have families with children where one parent is sacrificing time to drive. With the continuously worsening traffic situation, I hear of more people willing to spend a bit more to live slightly closer.
D. When trucks are lighter and only slightly weaker (engine) they can carry just as much if not more. When they are empty and going to be reloaded they will get better fuel econ even if the engine is close to the same simply because they are lighter.


My friend in the construction bis put it best..

If you have a small truck you vacation at chucky cheese. If you have an ok truck you vacation at disney land. If you have the big truck you vacation in hawaii... Im going to disneyland this year... guess where I wanted to go;/
Now with that kind of thinking you can imagine what they all want..


Ill be more clear. Many people pat 15 20 evem 30 amd more cents per mile just on fuel... and dont mind a bit. They might enjoy the drive soo much they spend 10-100 x as much as you or me do and consider it entertainment money well spent. I know people who spend more then half thier income wizzing about or buying the latest thin g to wizz about in. They love hydrogen and are the money behind it Add in the bis people wanting that bigger stronger truck add in cafe and phase out of flex fiel loophole... what will be the biggest strongest truck in 2020? Add in the soccer moms and empty nesters who would drive an 18 wheeler based suv if only they had a bigger garage.. stirr in young males either tryin to get laid or go realy fast ot both at the same time...

Even at 40 bucks a kilo... it qill likwly be cheap enough and cheaper then gas. Or did you think they went rhrough all this kust to make a hydrogen hatchback?


Well, the bill has passed Congress and Bush has promised to sign it tomorrow.

What really bothers me about this bill is the ethanol mandate. 36 billion gallons by 2022, 2/3 of which is supposed to come from as yet unproven cellulosic feedstocks.

More than anything else in this bill, this bothers me a lot. Tim Haab over at the Evironmental Economics blog has a good summary of the issues. I just hope Congress changes its mind once they realize that this can't possibly be met without serious effects on food prices (that are already being felt).



Doubling corn ethanol production in 14 years is arguably doable. Generally speaking, it is less than 5% per year increase; half of it is expected simply by higher yield per acre (last Monsanto corn hybrid in extensive field trails increased corn yield by 20+%). But this increase is about all corn ethanol could offer.

Cellulosic ethanol on such scale is pie in the sky, I agree. It was totally irresponsible to lawmakers to mandate immature technology expansion on such scale. I remember one study claiming that collection of agro biomass costs 120$ per wet ton…


People in this forum who mention the increased use of diesel in the US probably don't live here. First of all, diesel price fluctuates heavily with the seasons. In my area (east coast, the fuel was about 20 c cheaper in the summer, now it is almost 40c more expensive than economy gasoline. No one in their right mind would pay so much more for some increased fuel economy, at the same time sacrificing comfort and convenience as diesel engines are still a lot more noisy that their gasoline powered relatives. Since the early eighty's we have at regular intervals heard how the next generation of diesel engines is so much better and smoother and that wider adoption of diesel is about to happen. In my opinion, they still don't measure up. The reason that they are so popular in Europe is because that diesel prices are always lower than gasoline (at least in the countries where diesel powered cars are popular).


I live in France where Diesel penetration is high. Diesel in US is not supposed to increase, and please do not whish it will for the following reasons :
A diesel is pollution (smoke and NOx) and smell very very bad even with DPF!!!
B modern diesels are not durable and expensive to maintain...
C diesel engine is very expensive to produce compare to its gasoline counterpart with same power and same emission level (plus 3000€ minimum) and you will pay for it...moreover it will need low sulfur fuel...expensive.
D diesel has a very long time to boost delay and is very sluggy with an automatic tranny...
E last but not least : clean diesel fuel economy is very close to new gasoline engines from BMW and audi (diret injection, turbo) but STILL ultra more expensive to produce and STILL less durable...

Europe researchers tends to insist on new gasoline engines, and has big doubts on clean diesel solutions...


The comments about Americans not wanting to use diesel is a hang over from the 1970's. Anyone who has driven a NEW Mercedes E350 Diesel is simply in the dark.
This car has better acceleration than it's gas counter part and you can barely
hear the car running. These are not your grandfather's oldsmobiles.

For you readers in Europe: What happened in the US during the oil embargo was
American car companies, as usual, put out a very bad product. They took a 350
Chevrolet block, swapped the heads & pistons and called it a diesel. They were
very bad at best and didn't run at all at worst. Most people today when they talk
of diesel's are talking about these, not a new VW, Mercedes or BMW diesel,
which, quite frankly, I would prefer to just about any new gas car, especially
the BMW's and Mercs.

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