## NHTSA and EPA issue final CAFE/GHG rule for MYs 2017-2025; 40.3–41.0 mpg for MY 2021, estimated 48.7–49.7 mpg for MY 2025, 163 gCO2/mile for MY2025

##### 28 August 2012

The US Environmental Protection Agency (EPA) and the National Highway Traffic Safety Administration (NHTSA) issued the final rule for greenhouse gas emissions and fuel economy standards for MYs 2017-2025 for passenger cars, light-duty trucks, and medium-duty passenger vehicles. (Earlier post.) These rules represent the continuation of a harmonized and consistent National Program. (Earlier post.)

Consistent with its statutory authority, NHTSA developed two phases of standards in this rulemaking. The first phase, from MYs 2017-2021, includes final standards that are projected to require, on an average industry fleet-wide basis, a range from 40.3—41.0 mpg US (5.84 to 5.74 L/100km) in MY 2021. The second phase of the CAFE program, from MYs 2022-2025, includes standards that are not final, due to the statutory requirement that NHTSA set average fuel economy standards not more than 5 model years at a time.

Thus, the second phase standards are augural, meaning that they represent NHTSA’s current best estimate, based on the information available to the agency today, of what levels of stringency might be maximum feasible in those model years. NHTSA projects that those standards could require, on an average industry fleet wide basis, a range from 48.7–49.7 mpg (4.83 to 4.73 L/100km) in model year 2025.

EPA is establishing standards that are projected to require, on an average industry fleet-wide basis, 163 grams/mile of carbon dioxide in model year 2025, which would be equivalent to 54.5 mpg (4.3 L/100km) if this level were achieved solely through improvements in fuel efficiency. However, the agencies expect that a portion of these improvements will be made through improvements in air conditioning leakage and through use of alternative refrigerants, which would not contribute to fuel economy.

Both the CO2 and CAFE standards are footprint-based, as are the standards currently in effect for these vehicles through model year 2016. The standards will become more stringent on average in each model year from 2017 through 2025. Generally, the agencies note, the larger the vehicle footprint, the less numerically stringent the corresponding vehicle CO2 emissions and fuel economy targets.

As a result of the footprint-based standards, the burden of compliance is distributed across all vehicle footprints and across all manufacturers. Manufacturers are not compelled to build vehicles of any particular size or type (nor do the rules create an incentive to do so), and each manufacturer will have its own fleet-wide standard that reflects the light duty vehicles it chooses to produce.

The agencies will conduct a comprehensive mid-term evaluation and agency decision-making process for the MYs 2022-2025 standards. The agencies are also finalizing several provisions which provide compliance flexibilities and incentives, including:

• Credit Averaging, Banking and Trading. The agencies are continuing to allow manufacturers to generate credits for over-compliance with the CO2 and CAFE standards. A manufacturer will generate credits if its car and/or truck fleet achieves a fleet average CO2/CAFE level better than its car and/or truck standards. Conversely, a manufacturer will incur a debit/shortfall if its fleet average CO2/CAFE level does not meet the standard when all credits are taken into account.

As in the prior CAFE and GHG programs, a manufacturer whose fleet generates credits in a given model year would have several options for using those credits, including credit carry-back, credit carry-forward, credit transfers, and credit trading.

• Air Conditioning Improvement Credits. As proposed, EPA is establishing that the maximum total A/C credits available for cars will be 18.8 grams/mile CO2-equivalent and 24.4 grams/mile for trucks CO2-equivalent. The approaches used to calculate these credits for direct and indirect A/C improvement (i.e., improvements to A/C leakage (including substitution of low GHG refrigerant) and A/C efficiency) are generally consistent with those of the MYs 2012-2016 program, although there are several revisions.

Most notably, a new test for A/C efficiency, optional under the GHG program starting in MY 2014, will be used exclusively in MY 2017 and beyond. Under its EPCA authority, EPA proposed and is finalizing provisions to allow manufacturers to generate fuel consumption improvement values for purposes of CAFE compliance based on these same improvements in air conditioner efficiency.

• Off-Cycle Credits. Off-cycle credits are for measurable GHG emissions and fuel economy improvements attributable to use of technologies whose benefits are not measured by the standard mandated two-cycle test. EPA proposed and is finalizing provisions to allow manufacturers to generate fuel consumption improvement values for purposes of CAFE compliance based on the use of off-cycle technologies.

• Incentives for Electric Vehicles, Plug-in Hybrid Electric Vehicles, Fuel Cell Vehicles and compressed Natural Gas Vehicles. EPA is finalizing, as proposed, an incentive multiplier for CO2 emissions compliance purposes for all electric vehicles (EVs), plug-in hybrid electric vehicles (PHEVs), and fuel cell vehicles (FCVs) sold in MYs 2017 through 2021. The incentives are expected to promote increased application of these advanced technologies in the program’s early model years, which could achieve economies of scale that will support the wider application of these technologies to help achieve the more stringent standards in MYs 2022-2025.

In addition, in response to public comments persuasively explaining how infrastructure for compressed natural gas (CNG) vehicles could serve as a bridge to use of advanced technologies such as hydrogen fuel cells, EPA is finalizing an incentive multiplier for CNG vehicles sold in MYs 2017 through 2021.

NHTSA currently interprets EPCA and EISA as precluding it from offering incentives for the alternative fuel operation of EVs, PHEVs, FCVs, and NGVs, except as specified by statute, and thus did not propose and is not including incentive multipliers comparable to the EPA incentive multipliers described above.

• Incentives for Use of Advanced Technologies including Hybridization for full-Size Pick-up Trucks. The agencies recognize that the standards presented in this final rule for MYs 2017-2025 will be challenging for large vehicles, including full-size pickup trucks. To help address this challenge, the program will, as proposed, contain incentives for the use of hybrid electric and other advanced technologies in full-size pickup trucks.

The two agencies estimate the MY 2017-2025 National Program will save approximately 4 billion barrels of oil and reduce GHG emissions by the equivalent of approximately 2 billion metric tons over the lifetimes of those light duty vehicles produced in MYs 2017-2025. The agencies project that fuel savings will far outweigh higher vehicle costs, and that the net benefits to society of the MY 2017-2025 National Program will be in the range of $326 billion to$451 billion (7 and 3% discount rates, respectively) over the lifetimes of those light duty vehicles sold in MYs 2017-2025.

The MY 2017-2025 National Program is also projected to provide significant savings for consumers due to reduced fuel use. Although the agencies estimate that technologies used to meet the standards will add, on average, about $1,800 to the cost of a new light duty vehicle in MY 2025, consumers who drive their MY 2025 vehicle for its entire lifetime will save, on average,$5,700 to $7,400 (7 and 3% discount rates, respectively) in fuel, for a net lifetime savings of$3,400 to $5,000. This estimate assumes gasoline prices of$3.87 per gallon in 2025 with small increases most years throughout the vehicle’s lifetime.

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This reveals just how much nonsense there is in pushing for very high and costly mileage figures. Or imputing mileage benefits from putative reduced GHGs. Or forcing on motorists and automakers quotas for unproven, expensive, and techically premature automotive power plants.

There has been plenty of Science that now establishes that the whole concept of hydroflourocarbons are NOT responsible for the "Ozone Hole". Researching old atmospheric data from the 1940s and 1950s, reveal that the "Ozone Hole" existed then, before widespread A/C availability, and is therefore nantural. Other research reveals tat the assumed Ozone depleting chemical reactions are not what is taking place in the atmsophere; and the whole predicate on which the Hypothesis is based is incorrect.

The refrigerant makers were as instrumental in passing the Montreal compact as anybody. They wanted to charge more for a new class of now legally mandated refrigerant, under patent, rather than for the old, and more efficient refrigerants, which were coming off patent, and whose prices were in free fall. The ignorant enviros were used as merely convenient stooges.

Now the refrigerant makers are doing the same ploy over again.

The Montreal comapct has outlived any use it ever might have had. But laws endure long after any need. Just like the still existing law, requiring a man with a red lantern run before a motor car to warn the countryside, it is coming.

One of the most aggrevating and missing item of information on the EPA Maroney stickers is what the legally required "CAFE" milage, as well as the 'psuedo-realistic' EPA window sticker estimated milege figures really are. The EPA figures, which are not really scintifically rigorously specified, are subject to political manipulation. The legally required fuel economy is still the rigorously defined tests of the CAFE regulation.

The fact that there are two sets of numbers is a result of bureaucratic warfare between NHTSA and EPA, only. Meanwhile Europe uses yet another set of so-called tests that produce erroneous mileage figures in the 50 to the 70 mpg for essentially the same car that achieves under 30 mpg in our so called tests.

Meanwhile the bureaucrats are implicitly stating that Congress who set the previous legal mileage mandates is no longer needed; and they, colluding amongst themselves, can set them instead. Baloney!

Why are we setting man-made CO2 limits here? North America is a NET CO2 sink; and annually emits less CO2 than it sequesters by Man and Nature combined. This is an utter waste of time and money, but does keep bureaucrats employed, I suppose.

Better to give them shovels and let them dig holes and then fill them up again. At least they would get some exercise.

"The MY 2017-2025 National Program is also projected to provide significant savings for consumers due to reduced fuel use. Although the agencies estimate that technologies used to meet the standards will add, on average, about $1,800 to the cost of a new light duty vehicle in MY 2025" - Maybe the agencies should start building vehicles since they're apparently so much more cost effective and efficient at implementing the changes required to meet their own standards. I'd like to see the report listing specific technologies and techniques they're counting on to achieve the mileage results required. New vehicles of the same class get more expensive every generation even accounting for inflation. (example: 1976 Corolla$2,789 or $11,230 in todays dollars) I would venture a guess that the effect is largely a result of the costs incurred by manufacturers to meet the myriad government standards around the world. If this is not true and the costs increase primarily because of ever increasing customer expectations then that just means all the legislation is just a way to assert power and collect money through lobbyists and penalties. The NHTSA and EPA shouldn't even bother talking about the savings in fuel because there's no way for them to accurately predict the true cost of the legislation to any of the major manufacturers. The government can't even accurately predict the true cost of a single bill enacted into law! At one of the above poster could move to Somalia to live in a place without bureaucrats, regulations and a single law (jungle law) very similar to the single (far west law) of some 200+ years ago. I don't see the fuss here. They want 163 gms CO2 / mile, fleetwide by 2025. Shouldn't be too much of a stretch for the guys - by 2025 - 13 years is plenty of time: 2-3 generations to get to it. There are loads of cars in Europe and Japan that already meet it (< 102 gms / Km), and more coming down the line. The next gen VW Golf will get 85 gms / Km (diesel), available in Jan 2013 (diesel). http://www.autoexpress.co.uk/volkswagen/golf/59846/new-golf-official-details?DCMP=NLC-Newsletters&utm_campaign=newsletter&utm_medium=email&utm_source=newsletter If you give manufacturers clear signals, like the EUs CO2 rules, or CAFE, they can achieve them. They will moan and groan about the cost etc. but once they decide it is real and that they will HAVE to do it, they will spend the resources and do it. They days of cheap oil are over - nearly all the new discoveries are in deep water or other hard to reach places. Demand is rising all over the world as countries such as China (1.3 Bn people), India (1.1 Bn) etc. get motorized. The best way to deal with this is to push manufacturers to develop efficient cars, and to do it starting now, in a controlled fashion, rather than a few years later, in a panic when oil is$150 or $200. The new standard is the result of over a year of negotiations among the administration, automakers and environmental groups. http://bottomline.nbcnews.com Compared to using my money to buy gov employees PC cars using it to help people buy PC cars, I LIKE CAFE, as long as the is advance notification. Higher gas taxes cannot be passed, and we need to stem imports ASAP. The MPG numbers might be a bit high - it smells of “quick, hit 'em with a mandate before free enterprise finds a way, like is happening with Nat Gas”. Never mind Somalia, You go to Cuba, I assume Michael Moore is there. And I hope the years of negotiations are not more of the admin’s Chicago politics lest we be in for more polarization and backlash. TT...have you been to Somalia and Cuba lately? If so, you would certainly find other countries to compare. I have been to both places and they are not at all the same. I was luck to get out of Somalia alive. We visit Cuba almost every year without fear or problems. Of course, depending where you come from, you may not come back (from either country) in one piece. By the way, the new Mercedes 300 (2013-2014) will do 56 mpg and less than 100 g/Km. That will be better than CAFE 11-12 years sooner? I think that a revenue neutral carbon tax would be a better idea rather than all of the bureaucracy of CAFE. Looks like we have a new set of denialist trolls here. The Antarctic ozone hole arose around the 1980's and was NOT present from the onset of measurements. I expect their talk-radio educations will be much in evidence here in the weeks to come, as the Dunning-Kruger effect is never felt by its exemplars. @mahonj: Efficiency standards such as these all but guarantee a collapse in petroleum prices. Oft repeated nonsense: "The days of cheap oil are over ...demand is rising all over the world". Oil is not scarce and never will be. The oil industry itself projects very moderate growth in worldwide demand (1.5% to 3% annually) over the next few years, and that is probably overly optimistic. See the recent study by Ricardo. The United States may be at the point where petroleum consumption is falling year over year. We are still the largest consuming market in the world by far. I have mixed feelings on such significant rules. I don't like small cars one bit and I don't want to be forced to drive something the size of a Fiat 500, Prius C, Corolla or any other car improperly labeled as "mid size". Quite simply, they are "too small". Like many Americans, I drive plenty of miles yearly. I could never use an electric car with limited range, for example. However, I'm enamored with the technology of efficiency. And, I clearly see that such regulations are driving the research into higher efficiency. I simply hope it can be accomplished without costing a fortune, and requiring micro cars. Trevor: "(example: 1976 Corolla$2,789 or $11,230 in todays dollars)" My first car was an 81 Corolla, and compared to today's entry-level subcompacts, I think we're ahead on the value scale. The current Corolla is bigger than a 76, but a subcompact like the Fiesta at$13K gets better mileage, is more comfortable, safer, faster, more reliable, better handling, and better equipped. It also pollutes less and can survive years in the Northeast without being perforated by rust.

If you consider what the price of a 76 Corolla would have been with a few options (5 speed, defroster, FM radio, etc), I'm not convinced that we're even paying a penny more for all those improvements.

Bernard, there is a term for what you describe. It's called Hedonics. Based on the root word for, yes, you guessed it, hedonism. Automobiles today often have many more (sometimes luxury) features than 30 or 40 years ago. Hedonics takes into account each and every system, improvement or system and it's supposed value. But, we have become used to getting more for our money. The problem with hedonics is simply that no effort is made to integrate manufacturing and productivity improvements into the final product's cost.

Years ago, things were made by hand, machined by hand, fitted by hand. Today, robots are used, and production costs drop substantially.

Today's conventional cars take no longer to produce, even though they are much more complex, with their computerized systems. However, adding traction batteries (very expensive and heavy) Multiple high HP motor/generators and high current electronics can easily drive costs into the absurd range.

I'm not the prophet of doom. I love this stuff. But I also understand that we are not capable of making such complex machinery at the same cost as, say, a 1966 Mustang 6 cylinder with 3 speed automatic. Yet the automobile's capabilities are essentially equal.

The most repeated statement in speaches of the republican presidential convention:

"Try to speak like you're not reading this tele-prompter."

The only vehicle technology capable of achieving and exceeding this mileage mandate is Plug-in Hybrid. Unfortunately, auto manufacturers oppose PHEVs because they will last 50% longer in years and mileage; private utilities oppose PHEVs because it gives homeowners too much control over how they may conserve electricity.

An elected republican becomes a "Decider" running government services like a business, for business, and representing the best interests of anyone else is unconstitutional because Jesus hates poor people.

Sirkulat,

Your comments are unnecessary, and inaccurate. Auto manufacturers want to produce plug in hybrids. And, they want to do so yesterday, and for prices people are willing to pay. That's not easy.

GM gets kudo's from me for building the Volt. Unfortunately the Volt is not a great seller. I like the Volt, but I don't want to be forced to drive one. Nor do I want to be forced to drive a Prius.

"Regulations" work both ways my friend.

cujet....how about $10+/gallon gas? Would that be enough to drive more efficient vehicles? Since manufacturing cannot change overnight, and extra tax of$1/year or two would give them enough time to change the way they build cars.

Anyone ready to sign on to my "nickel a gallon per month" program?  Run it for 10 years and you get $6/gallon in taxes, more than enough to fix the highway trust fund and subsidize the purchase of more efficient vehicles. As a bonus, the only remaining Hummers on the road would be driven by the rich, the very stupid, and complete assholes. HD, When someone asked you to go to Cuba, instead of Somalia, I thought it was very illuminating to hear you say you had, already. When somebody else suggested we would have "wonderful cars" if gas were only taxed at$10.00/gallon, I expected someone to point out that Europe already does.

Yet European cars are hardly advanced. They are shrunken on average, and dirty, not legal to sell in America for about 20 years, without adding major cleanliness toxic emissions items. Which their automakers do add for exports here, after getting the technology essentially for free, mandated by US law from the US domestic automakers, and otherwise not significantly different from small cars for sale here.

Nor do advanced Hybrids and EVs even sell as well in Europe as here, either.

Where oh where are the "automotive wonders" of $10 buck a gallon gas??? I know Cuba has the most unusual versions of rolling antiques like 1957 Chevys and 1958 Fords you ever saw. They are pollution spewing antiques and may be wonderful to see automotive technology frozen in time, like insects in amber; but I don't think that was what was implied as "automotive wonders". EP, You don't have to add monhtly taxes as that is by and large, all the people who ever drove Hummers... But I can see, you are falling behind in reading technical journals; or you would know that many serious Greens already agree that the Ozone hole and CFLs was mostly a hoax foisted on them. Re-analyzing the mid-'50s antarctic IGY data helped establish that the Ozone Hole existed then; and the data predates widespread CFL usage. Furthermore recent, circa 2007-2010, measurements, in situ, of atmospheric chemistry changes, reveals that the commonly accepted CFL chemical reactions pre-supposed to create the Ozone hole, don't really occur often; but rather other chemical reactions that don't involve CFLs predominate. The Ozone Hole joins "acid rain" and "Alar apples" as example of mass hysteria based on a kernal of truth grossly exagerated, rather than valid Science. Nor do advanced Hybrids and EVs even sell as well in Europe as here, either. Where oh where are the "automotive wonders" of$10 buck a gallon gas???

It's right in front of your eyes:  per-capita European petroleum consumption is a fraction of the US figure.  A lot of this is in lifestyle changes and public investment rather than vehicle technology.
I can see, you are falling behind in reading technical journals; or you would know that many serious Greens already agree that the Ozone hole and CFLs was mostly a hoax foisted on them. Re-analyzing the mid-'50s antarctic IGY data helped establish that the Ozone Hole existed then
O RLY?  Care to show me a re-analysis of this which backdates the spring drop?  How about something which demonstrates that stratospheric chlorine and bromine have natural sources other than CFCs, methyl bromide, etc.?  Oddly, NASA (link above) doesn't seem to know this remarkable thing you claim.

Which is because it's nonsense.  The only question of interest is whether you're a paid troll (and liar) or a dupe giving cover to foreign interests like China and Mexico (countries which got delayed compliance under the Montreal protocols) for free.

IMHO, a gradually-rising fuel tax like E-P suggested is better than forcing car mfg's to make high-mpg cars and everyone have to pay for this extra costly technology.
For example, a person has a X amount of fuel budget a month. If he drives 10 miles per day, he can indulge in the ownership of a 10-mpg SUV. However, if he has to drive 30 miles/day, then he would trade in his SUV for a 30-mpg car in order to remain within the same fuel budget. If however, the gov. forces ever-increasing higher mpg vehicles, then even the ones who don't drive much still will have to pay for higher vehicle purchasing cost to subsidize others who drive more.

Another unforeseen consequence of higher mpg vehicles will be lower fuel tax collection if people are going to drive the same distance as before. However, data have shown that people actually may drive more when their vehicles are capable of higher mpg...longer commutes, and that will create more traffic congestions and higher risks of accidents. So, a fuel tax will be inevitable to maintain reasonable level of traffic congestion and to allow the gov. enough funds for road maintenance and construction of new roads to keep up with growing population.

Fuel taxes have great effect on high-mpg vehicle technology where instituted. Witness the Europeans with high-mpg diesel technology and the Japanese with high-mpg electric hybrid technology...while American mfg's are still busy collecting profits from sales of gas-guzzling SUV's until fuel prices hit the roof in 2008.

Rodger, I would like to give my concern with having an increasing fuel tax...

Can we agree that cars with significant mileage advantage cost more than similar cars that have lesser technologies? ex, Hybrids and EVs Vs. ICEs

Can we also agree that lower income individuals whom may have to commute are more susceptible to an increase in energy prices?

I believe that energy/fuel taxes can grossly impact the poor and still have minimal effect on driving habits. There isn't much of a relationship between price of energy and its use if its a necessity.

This is a major concern of many Americans when it comes to a flat gas tax increase. It only serves to further disenfranchise the working poor.

Keep in mind that the average age of registered vehicles are slowly increasing... and that is still with in a short time span of Cash for Clunkers.

Penalization of any kind to use energy can have disastrous effects on the economy. Fuel costs play a roll in every facet of almost every business, yet it has the biggest impact on the poor consumer, whom cannot buy their way out of their predicament.

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