One time oilman President George Bush on Wednesday signed off an historic increase in vehicle fuel efficiency requirements for vehicles sold in the United States.
Go deeper with GlobalData
After lengthy negotiations, much lobbying by the interested parties and even environmentalists’ criticism of hybrid car leader Toyota, the 822-page energy bill approved by the House of Representatives on Tuesday afternoon reached the presidential desk today.
While also manadating things like an eventual phase-out of incandescent light bulbs, the bill’s key point for auto industry players is a hike in the Corporate Average Fuel Economy (CAFÉ) fuel efficiency requirements by 40% to an industry fleet-wide 35 miles per (smaller US) gallon by 2020, reportedly the first update since a man named Ford was in the White House (’74-’76).
According to the Detroit News, Bush said the bill would address the vulnerability to disruptions in foreign oil supplies.
“This is a good bill. I’m pleased to sign it,” he was quoted as saying.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataAccording to the Motown paper, Bush noted that the bill allows the Transportation Department to set new attribute-based requirements for passenger cars, rather than one overall target – he said that reform was essential so the new rules do “not come at the expense of automobile safety.”
Many have suggested that broad increases in fuel economy under the prior system would simply give automakers an incentive to make vehicles smaller and lighter, the Detroit News added.
Bush was also reported to have praised a measure in the bill that will provide at least $US90m annually for battery research to make plug-in hybrids a reality.
The report said the bill’s new requirements begin with the 2011 model year and will require regulators to set new yearly mandates. It also raises the biofuel mandate to 36bn gallons by 2022 – a fivefold increase over current levels.
Apparently responding to the growing ‘fuel or food?’ debate, Bush acknowledged that pig farmers and others were getting nervous with the soaring price of corn used in animal feed.
According to the Detroit News, he said that’s why the bill increases research funding for cellulosic ethanol, made from material other than corn like switchgrass and woodchips.
Bush’s signature made the bill law the same day the European Union announced tough new CO2 emissions proposals – that will also operate with corporate averages – though affected automakers are already complaining loudly that the suggested penalties are far higher than those imposed on other industry segments.
