An Overview of New Automotive Rules

ThomasNet News (Butcher) - New rules establish an historic national program aimed at dramatically reducing greenhouse gas emissions and improving fuel economy for new cars and trucks sold in the U.S. Here we look at what the new standards mean for automakers, consumers and future passenger vehicles. The U.S. Department of Transportation (DOT) and the U.S. Environmental Protection Agency (EPA) have jointly established new federal rules that set national greenhouse gas emissions standards, with the goal of significantly increasing the fuel economy of all new passenger cars and light trucks sold in the United States.

The final guidelines, issued by the DOT's National Highway Traffic Safety Administration (NHTSA) and the EPA, set increasingly stringent fuel economy standards under the NHTSA's Corporate Average Fuel Economy (CAFE) program and greenhouse gas emission standards under the Clean Air Act for 2012 through 2016 model-year vehicles.

Announced last week, the emissions and mileage standards would translate to a combined fuel economy average for new vehicles (combined cars and light trucks) of 35.5 miles per gallon by 2016, nearly 10 mpg more than current NHTSA standards. However, the final figure could actually be as low as 34.1 mpg because automakers can receive credits for reducing greenhouse gas emissions in other ways, including preventing coolant leakage from air conditioners.

These regulations, which cover carbon dioxide, methane, nitrous oxide and hydrofluorocarbons, are expected to cut emissions of heat-trapping gases by about 30 percent from 2012 to 2016.

"These historic new standards set ambitious, but achievable, fuel economy requirements for the automotive industry that will also encourage new and emerging technologies," Transportation Secretary Ray LaHood said in a statement. "We will be helping American motorists save money at the pump, while putting less pollution in the air."

Specifically, officials said the national program aims to:
Save the average buyer of an average 2016 model-year car $3,000 over the life of the vehicle;
Conserve about 1.8 billion barrels of oil over the lifetime of the nation's regulated vehicles; and
Reduce nearly a billion tons of greenhouse gas emissions over the lives of the vehicles covered.

"The regulations don't come cheap," the Wall Street Journal notes.

For one, higher upfront vehicle costs concern auto dealers. According to industry and government estimates, reaching the new efficiency figure will add nearly $1,000 to the cost of the average new car by 2016.

However, as the Associated Press reports, the heads of the DOT and EPA said car owners could save more than $3,000 over the lives of their vehicles through better gas mileage.

Citing the EPA's projections, the Journal says "the requirements are expected to cost the auto industry $52 billion over five years, making it among the most expensive set of rules in U.S. history."

The EPA and the NHTSA expect automobile manufacturers will meet these standards by increasing adoption of conventional technologies that are already in commercial use, such as more efficient engines, transmissions, tires, aerodynamics and materials, as well as improvements in air conditioning systems. Both groups also expect that some manufacturers may pursue more advanced fuel-saving technologies, such as hybrid vehicles, clean diesel engines, plug-in hybrid electric vehicles and electric vehicles.

"By working together with industry and capitalizing on our capacity for innovation, we've developed a clean cars program that is a win for automakers and drivers, a win for innovators and entrepreneurs, and a win for our planet," EPA Administrator Lisa P. Jackson said.

The new standards, "the result of a May 2009 deal with the auto industry, represent a peaceful end to a contentious legal battle over how to regulate tailpipe emissions," the Washington Post reports.

"The car companies, particularly the domestic makers, had little choice but to accept the deal. Two of the Detroit Three, Chrysler and General Motors, were facing bankruptcy and taking federal bailout money," the New York Times says. "Ford said it was already moving to clean up its fleet and welcomed the certainty of a five-year plan."

The truce between the auto industry and state and federal governments produced a single national standard based on California's tough auto emissions law, enacted in 2004. According to the Times, the automakers "welcomed a national plan that does not require them to build different vehicles for different markets to comply with varying state laws."

Manufacturers will be able to build a single, light-duty national fleet that satisfies all federal requirements as well as the standards of California and other states. The collaboration of federal agencies also allows for clearer rules for all automakers, rather than three standards (DOT, EPA and a state standard).

"The regulations provide manufacturers with a roadmap for meeting significant mileage increases for model years 2012-2016, as well as the certainty and lead time necessary to cost effectively add new technology," the Alliance of Automobile Manufacturers, a trade group representing 11 automakers, said in a response to last week's announcement. "When fully implemented, the regulations will result in a 30 percent decrease in carbon dioxide emissions and a subsequent 40 percent increase in vehicle fuel economy."

"A year ago, the auto industry faced a regulatory maze resulting from multiple sets of inconsistent fuel economy/greenhouse gas standards," Dave McCurdy, president and CEO of the Alliance, said. "The national program announced today makes sense for consumers, for government policymakers and for automakers."

The DOT and the EPA received more than 130,000 public comments on the September 2009 proposed rules that showed "overwhelming support for the strong national policy."

In a separate announcement last week, the EPA said that it would not require power plants or other industrial sites to obtain federal pollution permits for emitting greenhouse gases before next January. The statement formally affirms a recent agency announcement that it would phase in the regulation of climate-altering gases over several years, starting with the largest sources.