Vermont is one of ten states that has implemented carbon dioxide emissions restrictions that start to take effect in 2009 and increase until 2016, eventually resulting in a thirty percent reduction. As expected, the industry is suing Vermont (related story) to try and stop the new law. During testimony in the trial industry expert Thomas Austin said the carmakers wouldn't be able to meet the requirements in the required time frame and would need until 2020 to comply.
The automakers suit is based on the premise that CO2 emissions are directly related to fuel consumption and as such fall under federal, not state regulatory authority. The carmakers might make a better case for themselves if they reached a settlement with the states that they would stop fighting federal fuel economy regulations if the states would back off on their own regulations. Assuming that something like the current congressional proposals pass, it would accomplish much of what the states are trying to do with a single regulation instead of a patchwork of state rules that just complicate things. Of course this depends on real and enforceable federal rules passing.