6 April 2010

The US Environmental Protection Agency (EPA) and the US Department’s of Transportation (DOT) National Highway Traffic Safety Administration (NHTSA) have finalized new rules that set the first-ever federal greenhouse gas (GHG) emission standards and tighten the corporate average fuel economy (CAFE) standards of all new passenger cars and light trucks sold in the United States. The new standards, which strengthen in each model year from 2012 through 2016, are expected to result in an average MY 2016 vehicle emission level of 250 g CO2/mile and 34.1 mpg (6.9 L/100 km) CAFE fuel economy.

DOT and EPA received more than 130,000 public comments on the September 2009 proposed rules, with support for the national policy. The adopted federal regulations will allow manufacturers to build a single vehicle fleet that satisfies all federal requirements as well as the standards of California and other states. Furthermore, in conjunction with the United States, Canada adopted Light Duty Vehicle GHG-Emissions regulations that are aligned with the US requirements. US EPA and NHTSA have worked closely with Environment Canada to ensure a common North American approach.

According to EPA estimates, the new national program:

  • Reduces of CO2 emissions by about 960 million metric tons over the lifetime of the vehicles regulated, equivalent to taking 50 million cars and light trucks off the road in 2030.
  • Conserves 1.8 billion barrels of oil over the lifetime of the vehicles regulated.
  • Enables the average car buyer of a 2016 MY vehicle a net savings of $3,000 over the lifetime of the vehicle, as upfront technology costs are offset by lower fuel costs.

The adopted standards are based on CO2 emissions-footprint curves, where each vehicle has a different CO2 emissions compliance target depending on its “footprint” value (related to the size of the vehicle). Generally, the larger the vehicle footprint, the higher the corresponding vehicle CO2 emissions target. As a result, each manufacturer will have its own fleet-wide standard which reflects the vehicles it chooses it produce. The following table shows the projected fleet-wide CO2 emission and fuel economy requirements. The EPA CO2-equivalent fuel economy figures are different from the CAFE figures because the EPA allows additional CO2 credits for air conditioning improvements.

Projected Fleet-Wide CO2 And Fuel Economy Compliance Levels
Vehicle Category & StandardModel Year
20122013201420152016
Passenger cars CO2, g/mi263256247236225
CO2 equiv. mpg33.834.736.037.739.5
CAFE mpg33.334.234.936.237.8
Light trucks CO2, g/mi346337326312298
CO2 equiv. mpg25.726.427.328.529.8
CAFE mpg25.426.026.627.528.8
Combined Cars & Trucks CO2, g/mi295286276263250
CO2 equiv. mpg30.131.132.233.835.5
CAFE mpg29.730.531.332.634.1

Automobile manufacturers will meet these standards by more widespread adoption of conventional technologies, such as more efficient engines, transmissions, tires, aerodynamics, and materials, as well as improvements in air conditioning systems. Although the standards can be met with conventional technologies—said the EPA and NHTSA—some manufacturers are also expected to pursue more advanced technologies like hybrid vehicles, clean diesel engines, plug-in hybrid electric vehicles, and electric vehicles.

The adopted rules also include a system of averaging, banking, and trading (ABT) of credits, based on a manufacturer’s fleet average CO2 performance. Credit trading is allowed among all vehicles a manufacturer produces, both cars and light trucks, as well as between companies. A number of further program flexibilities include:

  • Advanced Technology Credits: A temporary incentive program to encourage the early commercialization of advanced GHG/fuel economy control technologies, such as electric vehicles, plug-in hybrid electric vehicles, and fuel cell vehicles. Manufacturers who produce advanced technology vehicles will be able to assign a 0 g/mi CO2 emission value to the first 200,000 vehicles sold in model years 2012-2016, or 300,000 vehicles for manufacturers that sell 25,000 vehicles or more in model year 2012.
  • Off-Cycle Innovative Technology Credits: Emission credits for new and innovative technologies that reduce vehicle CO2 emissions, when the emission benefits are not captured over the regulatory test cycle.
  • Early Credits: A program allowing manufacturers to generate early credits in model years 2009-2011.
  • Flex-fuel and Alternative Fuel Vehicle Credits: Flex-Fuel Vehicle (FFV) will receive credits during model years 2012 to 2015, in line with limits established under the 2007 Energy Independence and Security Act.

While the CAFE program allowed manufacturers to pay fines in lieu of meeting fuel economy standards, under the Clean Air Act manufacturers cannot pay fines for noncompliance with the CO2 emission standards. The EPA has established a Temporary Lead-time Allowance Alternative Standards (TLAAS) program that will provide additional lead time for meeting the standards for manufacturers with limited product lines who have traditionally paid CAFE fines to the NHTSA.

Source: US EPA