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Source | CW

The U.S. Department of Transportation's National Highway Traffic Safety Administration (NHTSA) and the U.S. Environmental Protection Agency (EPA) on March 31 released the final Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule setting U.S. corporate average fuel economy (CAFE) and CO₂ emissions standards for model years 2021-2026 passenger cars and light trucks.

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The final rule will increase stringency of CAFE and CO₂ emissions standards by 1.5% each year through model year 2026, as compared with the standards issued by the Obama Administration in 2012, which would have required about 5% annual increases. This is a change from the proposal issued in 2018. The EPA says the majority of automakers are not meeting the 2012 standard without resorting to the use of credits. The final rule can be found here: https://www.epa.gov/regulations-emissions-vehicles-and-engines/safer-affordable-fuel-efficient-safe-vehicles-final-rule.

NHTSA is required by Federal law to set fuel economy standards at the maximum feasible level for passenger cars and light trucks, for every model year. If NHTSA determines that standards previously set are no longer maximum feasible, NHTSA can amend them. In determining what levels of CAFE standards would be maximum feasible, the law directs NHTSA to consider four specific factors: technological feasibility; economic practicability; the effect of other motor vehicle standards of the government on fuel economy; and the nation's need to conserve energy.

On April 2, 2018, the EPA issued the Mid-Term Evaluation Final Determination that found that the MY 2022-2025 CO₂ emissions standards are not appropriate and should be revised. For nearly two years, the agencies worked together to extensively analyze current automotive and fuel technologies, reviewed economic conditions and projections, and consulted with other Federal agency partners to ensure the most reliable and accurate analysis possible. The agencies also evaluated more than 750,000 public comments and held three public meetings.

The EPA says the SAFE Vehicles Rule reflects the realities of today's markets, including substantially lower oil prices than in the original 2012 projection, significant increases in U.S. oil production, and growing consumer demand for larger vehicles.

The EPA says the SAFE Vehicles Rule increases U.S. competitiveness by reducing regulatory costs by as much as $100 billion through model year 2029. According to NHTSA/EPA projections, it will also boost new vehicle sales through model year 2029 by up to 2.7 million vehicles. The EPA says the new rule will reduce the average price of a new vehicle by about $1,000 and thus will make it easier for Americans to afford to buy newer, cleaner and safer vehicles.

The EPA says the new SAFE Rule will also help more Americans afford newer vehicles, which NHTSA's research shows are safer than ever. The EPA estimates that about 3,300 fewer crash fatalities, 397,000 fewer injuries, and more than 1.8 million fewer vehicles damaged in crashes are projected over the lifetimes of vehicles built according to these new standards.

Under the SAFE Rule, the projected overall industry average required fuel economy in MYs 2021-2026 is 40.4 miles per gallon, compared to 46.7 mpg projected requirement in MY 2025 under the 2012 standards, and the new rule reduces the number of credits that are not associated with improved fuel economy. The agencies project that under these final standards, required technology costs would be reduced by $86 to $126 billion over the lifetimes of vehicles through MY 2029.

Under the rule, new vehicles will continue to be required to meet the EPA’s Clean Air Act's  pollution standards, ensuring that air quality will be protected from smog-forming emissions. The EPA says the rule will also see CO₂ reductions year over year.