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President Obama Announces Historic 54.5 mpg Corporate Average Fuel Efficiency Standard
 President Obama announced on July 29 a historic agreement with thirteen major automakers to pursue the next phase in the Administration’s national vehicle program, increasing corporate average fuel economy (CAFE) to 54.5 miles per gallon for cars and light-duty trucks by Model Year 2025. The President was joined by Ford, GM, Chrysler, BMW, Honda, Hyundai, Jaguar/Land Rover, Kia, Mazda, Mitsubishi, Nissan, Toyota, and Volvo – which together account for over ninety percent of all vehicles sold in the United States – as well as the United Auto Workers (UAW), and the State of California, who were integral to developing this agreement."This agreement on fuel standards represents the single most important step we’ve ever taken as a nation to reduce our dependence on foreign oil," said President Obama. "Most of the companies here today were part of an agreement we reached two years ago to raise the fuel efficiency of their cars over the next five years. We’ve set an aggressive target and the companies are stepping up to the plate. By 2025, the average fuel economy of their vehicles will nearly double to almost fifty-five miles per gallon." Building on the Obama administration’s agreement for Model Years 2012-2016 vehicles, which is expected to raise fuel efficiency to 35.5 mpg, the next round of standards will require performance equivalent to 54.5 mpg or 163 grams/ mile of carbon dioxide (CO2) for cars and light-duty trucks by Model Year 2025. These programs, combined with the model year 2011 light truck standard, represent the first meaningful update to fuel efficiency standards in three decades and span Model Years 2011 to 2025. Together, they propose to save American families $1.7 trillion dollars in fuel costs, and by 2025 is expected to result in an average fuel savings of over $8,000 per vehicle. Additionally, these programs are expected to dramatically cut oil consumption, saving a total of twelve billion barrels of oil, and by 2025 reduce oil consumption by 2.2 million barrels a day – as much as half of the oil that is imported from OPEC every day. The standards also curb carbon pollution, cutting more than six billion metric tons of greenhouse gas over the life of the program – more than the amount of carbon dioxide emitted by the United States last year. The oil savings, consumer, and environmental benefits of this comprehensive program are detailed in a new report entitled Driving Efficiency: Cutting Costs for Families at the Pump and Slashing Dependence on Oil, which the Administration released on July 29. The Environmental Protection Agency (EPA) and the Department of Transportation (DOT) have worked closely with auto manufacturers, the state of California, environmental groups, and other stakeholders for several months with the goal to ensure the standards are achievable, cost-effective, and preserve consumer choice. The program would increase the stringency of standards for passenger cars by an average of five percent each year. The stringency of standards for pick-ups and other light-duty trucks would increase an average of 3.5 percent annually for the first five model years and an average of five percent annually for the last four model years of the program, to account for the unique challenges associated with this class of vehicles. "These standards will help spur economic growth, protect the environment, and strengthen our national security by reducing America’s dependence on foreign oil," said U.S. Transportation Secretary Ray LaHood. "Working together, we are setting the stage for a new generation of clean vehicles." "This is another important step toward saving money for drivers, breaking our dependence on imported oil and cleaning up the air we breathe," said EPA Administrator Lisa P. Jackson. "American consumers are calling for cleaner cars that won’t pollute their air or break their budgets at the gas pump, and our innovative American automakers are responding with plans for some of the most fuel efficient vehicles in our history." A national policy on fuel economy standards and greenhouse gas emissions provides regulatory certainty and flexibility that reduces the cost of compliance for auto manufacturers while addressing oil consumption and harmful air pollution. Consumers will continue to have access to a diverse fleet and can purchase the vehicle that best suits their needs. EPA and NHTSA are developing a joint proposed rulemaking, which will include full details on the proposed program and supporting analyses, including the costs and benefits of the proposal and its effects on the economy, auto manufacturers, and consumers. After the proposed rules are published in the Federal Register, there will be an opportunity for public comment and public hearings. The agencies plan to issue a Notice of Proposed Rulemaking by the end of September 2011. California plans on adopting its proposed rule in the same time frame as the federal proposal. Given the long time frame at issue in setting standards for MY2022-2025 light-duty vehicles, EPA and NHTSA intend to propose a comprehensive mid-term evaluation. Consistent with the agencies’ commitment to maintaining a single national framework for vehicle GHG and fuel economy regulation, the agencies will conduct the mid-term evaluation in close coordination with California. In achieving the level of standards described above for the 2017-2025 program, the agencies expect automakers’ use of advanced technologies to be an important element of transforming the vehicle fleet. The agencies are considering a number of incentive programs to encourage early adoption and introduction into the marketplace of advanced technologies that represent "game changing" performance improvements, including:
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