Background
The 1975 Energy Policy Conservation Act added Title V, Improving Automotive Efficiency, to the Motor Vehicle Information and Cost Savings Act and established Corporate Average Fuel Economy (CAFE) standards for passenger cars and light duty trucks (LDT). The Act, passed in response to the 1973-74 oil crisis, had a near term goal to double new car fuel economy by model year (MY) 1985. However, since that time the standards remained almost unchanged. Under the 2007 Energy Independence and Security Act, CAFE standards should be significantly tightened by 2020.
The CAFE regulation requires each car manufacturer to meet a standard for the sales-weighted fuel economy for the entire fleet of vehicles sold in the USA in each model year. Fuel economy—expressed in miles per gallon (mpg)—is defined as the average mileage traveled by an automobile per gallon of gasoline or equivalent amount of other fuel.
CAFE standards are administered by the National Highway Traffic Safety Administration (NHTSA), an agency within the US Department of Transportation (DOT). NHTSA is responsible for establishing and amending the CAFE standards; promulgating regulations concerning CAFE procedures, definitions and reports; enforcing fuel economy standards and regulations; and all other aspects of CAFE. The Environmental Protection Agency (EPA) is responsible for calculating the average fuel economy for each manufacturer.
CAFE Standards
Existing Standards
The CAFE fuel economy standards since the beginning of the program are listed in Table 1. Two sets of standards have been established: those for passenger cars and for light trucks. The latter category includes vehicles of gross vehicle weight rating (GVWR) from 6,000 to 8,500 lbs, such as pickup trucks, minivans, or SUVs. In the initial years, separate standards existed for 2-wheel and 4-wheel drive LDTs, which were later replaced by one combined standard. For passenger cars, a manufacturers’ domestic and import fleets must meet the applicable CAFE standard separately.
| Year | Cars | Light Trucks | ||
|---|---|---|---|---|
| Combined | 2WD | 4WD | ||
| 1978 | 18.0 | |||
| 1979 | 19.0 | 17.2 | 15.8 | |
| 1980 | 20.0 | 16.0 | 14.0 | |
| 1981 | 22.0 | 16.7 | 15.0 | |
| 1982 | 24.0 | 17.5 | 18.0 | 16.0 |
| 1983 | 26.0 | 19.0 | 19.5 | 17.5 |
| 1984 | 27.0 | 20.0 | 20.3 | 18.5 |
| 1985 | 27.5 | 19.5 | 19.7 | 18.9 |
| 1986 | 26.0 | 20.0 | 20.5 | 19.5 |
| 1987 | 26.0 | 20.5 | 21.0 | 19.5 |
| 1989 | 26.5 | 20.5 | 21.5 | 19.0 |
| 1990 | 27.5 | 20.0 | 20.5 | 19.0 |
| 1991 | 27.5 | 20.2 | 20.7 | 19.1 |
| 1992 | 27.5 | 20.2 | ||
| 1993 | 27.5 | 20.4 | ||
| 1994 | 27.5 | 20.5 | ||
| 1995 | 27.5 | 20.6 | ||
| 1996 | 27.5 | 20.7 | ||
| 2005 | 27.5 | 21.0 | ||
| 2006 | 27.5 | 21.6 | ||
| 2007 | 27.5 | 22.2 | ||
| 2008 | 27.5 | 22.5 | ||
| 2009 | 27.5 | 23.1 | ||
| 2010 | 27.5 | 23.5 | ||
Reformed CAFE. Effective 2011, a reformed CAFE program has been adopted for light trucks. During a transition period 2008-2010, manufacturers have the choice of complying either with the unreformed CAFE standards shown in Table 1, or with the reformed CAFE rules.
Under reformed CAFE, each manufacturer’s required level of CAFE is based on target levels set according to vehicle size. The targets are assigned according to a vehicle’s “footprint”—the product of the average track width (the distance between the centerline of the tires) and wheelbase (the distance between the centers of the axles). Each vehicle footprint value is assigned a target specific to that footprint value. Compliance is determined by comparing a manufacturer’s fleet average fuel economy in a model year with a required fuel economy level calculated using the manufacturer’s actual production levels and the category targets.
The target values are determined from the following continuous mathematical equation, based on the vehicle footprint and four parameters (a ... d) which are adopted for each model year, Table 2.
T = [1/a + (1/b - 1/a) e(x-c)/d/(1 + e(x-c)/d)]-1
where:
T - fuel economy target, mpg
a - maximum fuel economy target, mpg
b - minimum fuel economy target, mpg
c - footprint value at which the fuel economy target is midway between a and b, ft2
d - parameter defining the rate at which the value of targets decline from the largest to smallest values, ft2
e = 2.718
x - footprint of the vehicle model, ft2
| Parameter | Year | |||
|---|---|---|---|---|
| 2008 | 2009 | 2010 | 2011 | |
| a | 28.56 | 30.07 | 29.96 | 30.42 |
| b | 19.99 | 20.87 | 21.20 | 21.79 |
| c | 49.30 | 48.00 | 48.49 | 47.74 |
| d | 5.58 | 5.81 | 5.50 | 4.65 |
The resulting CAFE target curve is an elongated S-shape, with fuel economy targets decreasing from a to b as the footprint increases. An example target function is shown in Figure 1.
![[graph]](img/reformed_cafe.png)
Figure 1. Example CAFE Light Truck Target Function
The reformed CAFE regulation also applies to medium duty passenger vehicles (MDPVs) of GVWR up to 10,000 lbs as part of the MY 2011 regulated light truck fleet. Thus, the regulation captures nearly all larger size pick-up trucks and SUVs which were excluded from the unreformed CAFE fleet.
The DOT estimated that the average light truck target required of manufacturers under the reformed CAFE rule in MY 2011 will be 24.0 mpg.
Future Standards
The Energy Independence and Security Act signed into law on December 19th, 2007 mandates a 40% increase in fuel economy by 2020. Tougher fuel economy standards should be set starting with MY 2011, until the standards achieve a combined average fuel economy of 35 mpg for MY 2020.
The future CAFE standards will apply to the total fleet of passenger and non-passenger vehicles manufactured for sale in the United States, up to a GVWR of 10,000 lbs.
CAFE Testing
CAFE fuel economy testing is done over the same laboratory test that is used to measure exhaust emissions (FTP-75). CAFE certification is typically done based on fuel economy data provided by the manufacturers. In some cases, the EPA performs the testing in its laboratory in Ann Arbor, MI.
The CAFE fuel economy figures can be significantly different from the vehicle fuel economy data published by the EPA/DOE in the Fuel Economy Guide report and on new vehicle labels. There are three sets of fuel economy figures:
- EPA’s unadjusted dynamometer values,
- EPA’s adjusted on-road values, and
- NHTSA’s CAFE values.
The unadjusted EPA values are calculated based on CO2 emissions measured over the dynamometer test, using a carbon balance equation. The EPA on-road fuel economy values provided to consumers on new vehicle labels, in the EPA/DOE Fuel Economy Guide, and in EPA’s Green Vehicle Guide are adjusted downward by 15%, to make the data more representative of the real world driving conditions.
The CAFE values—used to determine manufacturers’ compliance with the average fuel economy standards—are significantly higher than the EPA on-road values. The CAFE data reported by the DOT is not adjusted by the 15% factor used by the EPA. Furthermore, the following caveats apply to the CAFE values:
- The unreformed CAFE standards (before MY 2011) did not apply to vehicles above 8,500 lbs GVWR. Many pickup trucks and some of the largest SUVs which belong to this category were excluded from CAFE data.
- Credits are provided for alternative fuel vehicles. The CAFE fuel economy of an alternative fueled vehicle is calculated by dividing its real fuel economy by a factor of 0.15. For instance, a 15 mpg natural gas vehicle will be rated as a 100 mpg gasoline vehicle. For bi-fuel vehicles, this calculation is applied to the expected percentage of alternative fuel use.
- Manufacturers who exceed the standards earn CAFE credits, which can be applied to any three consecutive model years immediately prior or subsequent to the model year in which the credit was earned.
Compliance
Achieved CAFE fuel economy—for the total US market fleet of cars, light trucks, and the combined cars and LDT—is compared with CAFE standards in Figure 2. CAFE standards are met if the achieved fuel economy level is higher than the respective standard.
![[graph]](img/cafe.png)
Figure 2. Compliance with CAFE Standards
CAFE fuel economy figures achieved since 2000 are also listed in Table 3 (in mpg and in the metric units of liters per 100 km).
| Year | Cars | Light Trucks | Total Fleet | |||
|---|---|---|---|---|---|---|
| mpg | l/100 km | mpg | l/100 km | mpg | l/100 km | |
| 2000 | 28.5 | 8.25 | 21.3 | 11.04 | 24.8 | 9.48 |
| 2001 | 28.8 | 8.17 | 20.9 | 11.25 | 24.5 | 9.60 |
| 2002 | 29.0 | 8.11 | 21.4 | 10.99 | 24.7 | 9.52 |
| 2003 | 29.4 | 8.00 | 21.6 | 10.89 | 25.0 | 9.41 |
| 2004 | 29.3 | 8.03 | 21.5 | 10.94 | 24.7 | 9.52 |
Manufactures whose fleets fail to meet CAFE standards are liable for a civil penalty of $5.50 per each tenth of a mpg under the target value times the total volume of vehicles manufactured for a given model year. From 1983 to 2004, manufacturers paid more than $618 million in civil penalties. Most European manufacturers regularly pay CAFE civil penalties ranging from less than $1 million to more than $27 million annually. Asian and US manufacturers have never paid a civil penalty.