Flanked by auto industry and auto union officials, president Obama yesterday announced a new national policy aimed at both increasing fuel economy and reducing greenhouse gas pollution for all new cars and trucks sold in the United States.
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The new standards, covering model years 2012-2016, and ultimately requiring an average fuel economy standard of 35.5mpg in 2016, are projected to save 1.8bn barrels of oil over the life of the programme with a fuel economy gain averaging more than 5% per year and a reduction of approximately 900m tonnes in greenhouse gas emissions, according to the White House. This would surpass the CAFE law passed by Congress in 2007 required an average fuel economy of 35mpg in 2020.
“In the past, an agreement such as this would have been considered impossible,” said Obama. “That is why this announcement is so important, for it represents not only a change in policy in Washington, but the harbinger of a change in the way business is done in Washington. As a result of this agreement, we will save 1.8bn barrels of oil over the lifetime of the vehicles sold in the next five years. And at a time of historic crisis in our auto industry, this rule provides the clear certainty that will allow these companies to plan for a future in which they are building the cars of the 21st century.”
The policy delivers on Obama’s commitment to enact more stringent fuel economy standards and is the result of “unprecedented” collaboration between the Department of Transportation (DOT), the Environmental Protection Agency (EPA), auto manufacturers, the United Auto Workers, leaders in the environmental community, the state of California, and other state governments.
“The president brought all stakeholders to the table and came up with a plan to help the auto industry, safeguard consumers, and protect human health and the environment for all Americans,” said EPA administrator Lisa Jackson. “A supposedly ‘unsolvable’ problem was solved by unprecedented partnerships. As a result, we will keep Americans healthier, cut tonnes of pollution from the air we breathe, and make a lasting down payment on cutting our greenhouse gas emissions.”
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By GlobalData“A clear and uniform national policy is not only good news for consumers who will save money at the pump, but this policy is also good news for the auto industry which will no longer be subject to a costly patchwork of differing rules and regulations,” said Carol Browner, assistant to the president for energy and climate change. “This an incredible step forward for our country and another way for Americans to become more energy independent and reduce air pollution.”
A national policy on fuel economy standards and greenhouse gas emissions has been welcomed by the auto manufacturers because it provides regulatory certainty and predictability and includes flexibilities that will significantly reduce the cost of compliance. The collaboration of federal agencies also allows for clearer rules for all automakers, instead of three standards (DOT, EPA and a state standard).
“We are pleased president Obama is taking decisive and positive action as we work together toward one national standard for vehicle fuel economy and greenhouse gas emissions that will benefit the environment and the economy,” said Ford CEO Alan Mulally.
“This national program will allow us to move forward toward final regulations that all stakeholders can support.
“The framework of the national programme will give us greater clarity, certainty and flexibility to achieve the nation’s goals. We will continue to work with the federal agencies to finalise the standards that we are committed to meeting.”
“GM and the auto industry benefit by having more consistency and certainty to guide our product plans,” GM CEO Fritz Henderson said in a statement.
Top Toyota US executive Jim Lentz said the single national standard will enhance vehicle choice for consumers.
“President Obama is uniting federal and state governments, the auto industry, labour unions and the environmental community behind a programme that will provide for the biggest leap in history to make automobiles more fuel efficient,” said department of transportation Secretary Ray LaHood.
Reuters noted the new programme would allow the EPA to regulate tailpipe emissions for the first time while defusing efforts by California and 13 other states to set stricter standards on their own.
“Right now, the rules governing fuel economy in this nation are inadequate, uncertain and in flux,” Obama said in his address at the White House. “We will avoid an inefficient and ineffective system of regulations that govern our automakers.”
“The status quo is no longer acceptable,” Obama said. “We have done little to increase fuel efficiency of America’s cars and trucks for decades.”
The Obama administration said California would yield to the new federal policy and that a series of lawsuits around California’s efforts led by the auto industry would be dropped.
The new programme would add about US$600 to the price of producing a vehicle compared with the current law, which requires automakers to achieve a fleet average of 35 mpg by 2020, a 40% increase over today’s performance, Reuters said.
Some vehicles, most made by overseas manufacturers, already meet or exceed the standards set to be proposed.
California senator Barbara Boxer, chairman of the environment and public works committee, called the development “good news for all of us who have fought long and hard” to reduce global warming and reduce US dependence on imported oil, according to Reuters.
