2025 CAFE target set at 54.5 mpg; everyone's apparently happy with that

Following the official announcement this morning that the new 2025 Corporate Average Fuel Economy standard would be set at 54.5 miles per gallon, our email box overflowed with something we rarely see: near-unanimous support. Everyone from the automakers to the Union of Concerned Scientists, from the United Auto Workers to the American people (through a study released today by the Pew Environment Group) seem to agree: 54.5 mpg is the right fuel economy target. Sure, some of the groups would have been happier with the previously bandied-about 62 mpg or even 56.2 mpg, but almost everyone is putting on a happy face today.

Surrounding the President as he made the announcement were the heads of many automakers, including Dan Akerson (GM), Alan Mulally (Ford), Sergio Marchionne (Chrysler), John Krafcik (Hyundai Motor America), Jim Lentz (Toyota Motors Sales USA) and more. The OEMs brought a bevy of fuel-efficient vehicles, too, including plug-ins like the Nissan Leaf and the Chevrolet Volt, a bunch of hybrids couple of a big trucks that aren't the gas guzzlers of yesteryear: a Ford F-150 with EcoBoost and a Dodge Ram 4x4 SLT.

Of course, we're sure there will be continued contention over what is the best fuel economy goal for the United States – the American Council for an Energy-Efficient Economy, for example, says that the "proposal does not drive advanced technology to its maximum potential," and warns that it could be watered down even further – but, for now, pretty much everyone appears to be on the same page. Even California, which could (and has, in the past) gone its own way with fuel economy standards because of the Clean Air Act, has given its approval to 54.5. As our friend Jim Motavalli wrote in BNET yesterday, President Obama, "seems to have crafted a fairly good compromise that nobody actively hates." The behind-the-scenes negotiations must have been interesting to watch, eh?
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President Obama Announces Historic 54.5 mpg Fuel Efficiency Standard
Consumers will save $1.7 trillion at the pump, $8K per vehicle by 2025

WASHINGTON, DC – President Obama today announced a historic agreement with thirteen major automakers to pursue the next phase in the Administration's national vehicle program, increasing fuel economy to 54.5 miles per gallon for cars and light-duty trucks by Model Year 2025. The President was joined by Ford, GM, Chrysler, BMW, Honda, Hyundai, Jaguar/Land Rover, Kia, Mazda, Mitsubishi, Nissan, Toyota and Volvo – which together account for over 90% of all vehicles sold in the United States – as well as the United Auto Workers (UAW), and the State of California, who were integral to developing this agreement.

"This agreement on fuel standards represents the single most important step we've ever taken as a nation to reduce our dependence on foreign oil," said President Obama. "Most of the companies here today were part of an agreement we reached two years ago to raise the fuel efficiency of their cars over the next five years. We've set an aggressive target and the companies are stepping up to the plate. By 2025, the average fuel economy of their vehicles will nearly double to almost 55 miles per gallon."

Building on the Obama administration's agreement for Model Years 2012-2016 vehicles, which will raise fuel efficiency to 35.5 mpg and begin saving families money at the pump this year, the next round of standards will require performance equivalent to 54.5 mpg or 163 grams/ mile of CO2 for cars and light-duty trucks by Model Year 2025. Achieving the goals of this historic agreement will rely on innovative technologies and manufacturing that will spur economic growth and create high-quality domestic jobs in cutting edge industries across America.

These programs, combined with the model year 2011 light truck standard, represent the first meaningful update to fuel efficiency standards in three decades and span Model Years 2011 to 2025. Together, they will save American families $1.7 trillion dollars in fuel costs, and by 2025 result in an average fuel savings of over $8,000 per vehicle. Additionally, these programs will dramatically cut the oil we consume, saving a total of 12 billion barrels of oil, and by 2025 reduce oil consumption by 2.2 million barrels a day – as much as half of the oil we import from OPEC every day.

The standards also curb carbon pollution, cutting more than 6 billion metric tons of greenhouse gas over the life of the program – more than the amount of carbon dioxide emitted by the United States last year. The oil savings, consumer, and environmental benefits of this comprehensive program are detailed in a new report entitled Driving Efficiency: Cutting Costs for Families at the Pump and Slashing Dependence on Oil, which the Administration released today.

The Environmental Protection Agency (EPA) and the Department of Transportation (DOT) have worked closely with auto manufacturers, the state of California, environmental groups, and other stakeholders for several months to ensure these standards are achievable, cost-effective and preserve consumer choice. The program would increase the stringency of standards for passenger cars by an average of five percent each year. The stringency of standards for pick-ups and other light-duty trucks would increase an average of 3.5 percent annually for the first five model years and an average of five percent annually for the last four model years of the program, to account for the unique challenges associated with this class of vehicles.

"These standards will help spur economic growth, protect the environment, and strengthen our national security by reducing America's dependence on foreign oil," said U.S. Transportation Secretary Ray LaHood. "Working together, we are setting the stage for a new generation of clean vehicles."

"This is another important step toward saving money for drivers, breaking our dependence on imported oil and cleaning up the air we breathe," said EPA Administrator Lisa P. Jackson. "American consumers are calling for cleaner cars that won't pollute their air or break their budgets at the gas pump, and our innovative American automakers are responding with plans for some of the most fuel efficient vehicles in our history."

A national policy on fuel economy standards and greenhouse gas emissions provides regulatory certainty and flexibility that reduces the cost of compliance for auto manufacturers while addressing oil consumption and harmful air pollution. Consumers will continue to have access to a diverse fleet and can purchase the vehicle that best suits their needs.

EPA and NHTSA are developing a joint proposed rulemaking, which will include full details on the proposed program and supporting analyses, including the costs and benefits of the proposal and its effects on the economy, auto manufacturers, and consumers. After the proposed rules are published in the Federal Register, there will be an opportunity for public comment and public hearings. The agencies plan to issue a Notice of Proposed Rulemaking by the end of September 2011. California plans on adopting its proposed rule in the same time frame as the federal proposal.
Given the long time frame at issue in setting standards for MY2022-2025 light-duty vehicles, EPA and NHTSA intend to propose a comprehensive mid-term evaluation. Consistent with the agencies' commitment to maintaining a single national framework for vehicle GHG and fuel economy regulation, the agencies will conduct the mid-term evaluation in close coordination with California.

In achieving the level of standards described above for the 2017-2025 program, the agencies expect automakers' use of advanced technologies to be an important element of transforming the vehicle fleet. The agencies are considering a number of incentive programs to encourage early adoption and introduction into the marketplace of advanced technologies that represent "game changing" performance improvements, including:

Incentives for electric vehicles, plug-in hybrid electric vehicles, and fuel cells vehicles;
Incentives for advanced technology packages for large pickups, such as hybridization and other performance-based strategies;
Credits for technologies with potential to achieve real-world CO2 reductions and fuel economy improvements that are not captured by the standards test procedures.

In addition, EPA plans to propose provisions for:
Credits for improvements in air conditioning (A/C) systems, both for efficiency improvements and for use of alternative, lower global warming potential refrigerant;
Treatment of compressed natural gas (CNG);
Continued credit banking and trading, including a one-time carry-forward of unused MY 2010-2016 credits through MY 2021.



WASHINGTON (July 29, 2011) –The Obama administration today unveiled an agreement with major automakers and the state of California on a framework to strengthen the nation's fuel efficiency and auto pollution standards for new cars and light trucks. This proposal, which will apply to vehicles sold in model years 2017 to 2025, will set a global warming pollution standard of 163 grams per mile by 2025, the equivalent of 54.5 miles per gallon (mpg) if met exclusively with fuel efficiency improvements, or a Corporate Average Fuel Economy (CAFE) standard of 48-49 mpg assuming full use of air conditioning improvements. That would translate to a 2030 window sticker of about 36 mpg, up from 21 mpg today.

These standards build on the successful National Program for model years 2012 to 2016, which allows automakers to build a single national fleet to comply with Clean Air Act standards from the Environmental Protection Agency (EPA) and the California Air Resources Board (CARB), as well as Corporate Average Fuel Economy (CAFE) standards administered by the Department of Transportation (DOT).

The following is a statement from Michelle Robinson, director of the Union of Concerned Scientists' Clean Vehicles program:

"These standards will give our cars and trucks a technology makeover. We will still see the same types of vehicles on the road, but they will be dramatically more fuel efficient, cost less to operate, and produce less pollution. For the second time, President Obama has brought together the auto industry, the states, and other stakeholders to support strong standards that will protect consumers from high gas prices, curb global warming pollution, cut our oil dependence, and create innovative jobs in the American auto industry. We applaud the Obama administration and California for moving forward with these important standards.

"The technology exists to make any car, truck or SUV cleaner and more fuel efficient, and these standards will unleash innovation in the auto industry.

"This agreement is an important step forward, but there are still parts of the plan that need to be resolved. If they aren't implemented correctly, they could turn into loopholes. If automakers can meet the standards with accounting tricks instead of using better technology, the program's overall benefits would be eroded. We look forward to working with the administration and different stakeholders to evaluate and revise these standards so they produce the best vehicles possible for consumers, the auto industry, the country and the planet."

Based on UCS's current understanding of the proposal and assuming no loopholes, UCS experts anticipate that the standards for model years 2017 to 2025 will deliver the following benefits in 2030 in addition to the benefits from the first round of standards:

Cut oil consumption by as much as 1.5 million barrels per day -- 23 billion gallons of gasoline annually -- by 2030. That is equivalent to U.S. imports from Saudi Arabia and Iraq in 2010.
Cut carbon pollution by as much as 280 million metric tons (MMT) in 2030, which is equivalent to shutting down 72 coal-fired power plants.
Lower fuel expenditures at the pump by over $80 billion in 2030 -- even after paying for the cost of the necessary technology, consumers will still clear $50 billion in savings that year alone.

Obama Administration, Auto Industry in Sync with Americans' Opinion on Fuel Economy
Pew Clean Energy Program poll finds strong support for ambitious standards

WASHINGTON (July 28, 2011)-Against a backdrop of sharp differences on a variety of current public policy issues, new polling by the Pew Clean Energy Program demonstrates strong support from American voters for immediate action on vehicle fuel economy.

In a national poll* conducted for Pew by the bipartisan polling team The Mellman Group, Inc. and Public Opinion Strategies between July 8-12, 2011, 91 percent of Americans agree that dependence on foreign oil is a "very serious" or "somewhat serious" threat to U.S. security, with 61 percent indicating it is a "very serious" threat. These views cut across demographic and partisan lines, with 65 percent of Republicans, 57 percent of Democrats and 62 percent of independents identifying dependence on foreign oil as a "very serious threat" to national security.

The polling results reinforce news reports of an ambitious proposed interim fuel economy rule agreement reached by the Obama administration, the auto industry and other stakeholders to improve fuel efficiency for cars and light-duty trucks in model years 2017-2025. The proposed standard is to be announced Friday, July 29, 2011.

The survey found 82 percent of respondents support an increased fuel efficiency standard of 56 miles per gallon (mpg) by 2025, with 68 percent who "favor strongly." Overwhelming majorities in every demographic subgroup support increased fuel efficiency to 56 mpg, including 70 percent of Republicans, 87 percent of Democrats and 88 percent of independents.

Voters across all regions also backed increasing fuel economy to 56 mpg, with 80 percent in the Northeast, 85 percent in the Midwest, 77 percent in the South and 86 percent in the West. Further, 92 percent of Americans believe it is either "very important" (69 percent) or "somewhat important" (23 percent) for the United States to take action now to increase fuel efficiency.

"This proposed rule will give Americans what they want," said Phyllis Cuttino, director of the Pew Clean Energy Program. "It will reduce our dependence on foreign oil, save consumers money at the pump, spur technological innovation, create jobs in the automobile industry and reduce harmful pollution."

"Just as they did in 2009, the administration, the auto industry and other stakeholders have come together and agreed to a higher mpg standard-this time 54.5 mpg-that will both serve the interest of the public and provide market certainty for industry," Cuttino said. "We look forward to seeing the details of the proposed rule. As it is finalized over the coming months, the administration must ensure that it is not further watered down."

*This analysis represents the findings of a national survey of 1,000 likely 2012 general election voters. Interviews were conducted by telephone July 8-12, 2011, using a national registration-based sample. Respondents were screened for being likely voters. The margin of error for this survey is +/-3.1 percent at the 95 percent level of confidence. The margin of error is higher for subgroups.

The Pew Environment Group is the conservation arm of The Pew Charitable Trusts, a nongovernmental organization that works globally to establish pragmatic, science-based policies that protect our oceans, preserve our wildlands and promote clean energy.

BlueGreen Alliance and Labor, Environmental Partners Support Administration's New Fuel Efficiency and Auto Pollution Standards

The BlueGreen Alliance (BGA) and its partners support President Obama's proposal of a stronger fuel efficiency standard of 54.5 miles per gallon as an important step towards building a strong national program for light duty vehicles sold in model years 2017-2025.

"The UAW is pleased to join our BGA partners in supporting this framework agreement," said United Auto Workers President Bob King. "We congratulate and thank President Obama and his administration for bringing all the stakeholders together in a compromise that moves the industry forward."

"After decades of inaction and stagnation, President Obama has ensured 15 years of continuous progress to help cut our dangerous addiction to oil, create American jobs, save families money at the pump, curb dangerous pollution and tackle climate disruption," said Michael Brune, Executive Director of the Sierra Club. "It is critical that the Administration put technology to work to ensure the strongest final standards possible for the greatest benefits to American families and workers."

"This is a strong step toward reducing America's dependence on oil, curbing climate change and protecting our health," said Peter Lehner, Executive Director of the Natural Resources Defense Council. "While Congress is tied up in ideological gridlock on the debt limit, the president, the auto companies, the UAW, environmentalists and clean car states have, once again, shown what governing is and what can be accomplished by constructive compromise."

"Whether they drive a compact car or a large pickup truck, all Americans deserve to see much greater fuel efficiency - and savings - in their next vehicle," said Larry Schweiger, President and CEO of the National Wildlife Federation. "With technology that delivers efficiency and performance together, these standards ensure that increasingly the vehicles we rely on to work in the outdoors will work for the outdoors, and for America".

According to Driving Growth, a joint report by the United Autoworkers, Natural Resources Defense Council, and Center for American Progress, up to 150,000 additional American jobs could be created by reaching 40 miles per gallon through 2020.

"Innovative programs such as the Advanced Technology Vehicle Manufacturing loans have already leveraged $8 billion in investment into nearly 40,000 auto industry jobs in the U.S.," said King. "Federal policies designed to attract manufacturing investment will keep America on a level playing field with other nations that are moving aggressively to boost green auto technology."

"This decision shows appropriate faith in American technological abilities and should equip us to compete for market share, jobs and the cutting edge of innovation," said Kevin Knobloch, President of the Union of Concerned Scientists. "Our hope is that the auto companies will be bullish about meeting and exceeding these standards ahead of schedule, and thus show the country and the world what we are made of."

"As America's working families continue to struggle with high gas prices and the fragile economic recovery, this is the right step to take at the right time to help save consumers money at the gas pump and create new American jobs," said David Foster, Executive Director of the BlueGreen Alliance. "America sends an estimated $1 billion daily to foreign countries to pay for oil. This new standard proposed by President Obama will result in keeping more of those dollars here in the United States, set the stage for weaning America off foreign oil addiction for good, and will result in the long-term reductions in GHG pollution that we need to create a sustainable clean energy economy."

"We look forward to continuing our work with the Obama Administration to ensure these new standards are implemented in a way that holds the auto industry accountable, delivers on the promise of significant fuel efficiency improvement and pollution reduction, and maximizes job creation in America. We applaud the efforts undertaken so far and believe that strong, feasible standards can guarantee the best possible outcome for American workers, our communities, the economy, and the environment," said Foster.

Major Increases in Car and Light Truck Fuel Economy Standards Take Shape, but Some Provisions Could Undermine Economic and Environmental Benefits

Washington, D.C. (July 29, 2011): President Obama today presented a plan to increase fuel economy and greenhouse gas standards for cars and light trucks in 2017-2025 that would raise fuel economy to 75 percent above 2010 levels. "This is a major step in reducing our oil dependence and consumers' vulnerability to high gasoline costs," said ACEEE Transportation Program Director Therese Langer. "By 2030, this round of standards could save more oil than we currently import from Saudi Arabia and Iraq, combined."

The proposal does not drive advanced technology to its maximum potential, however, and includes provisions that could undermine the program's economic and environmental benefits. "There's a possibility of further erosion before the standards are finalized, so the next several months will be crucial to ensuring that the benefits this program promises are realized," said Langer.

Fuel economy requirements vary by vehicle size, with smaller vehicles having higher targets than larger ones. But the percentage efficiency improvement for large trucks will be much below what will be required of cars and smaller trucks. "Letting U.S. manufacturers return to the pre-bailout mode of foot-dragging on fuel efficiency for large pickups goes against the interests of the consumer and, in the longer term, the industry itself," said Langer. "We'd like to see safeguards against manufacturers' gaming the standards by making more trucks, and bigger trucks, to lower the fuel efficiency requirements for their products.

While the level of the standards in 2025 will be near 50 miles per gallon once air conditioning credits are accounted for, the resulting average vehicle window label value will be between about 36 miles per gallon. That's because the standards are based on laboratory testing, while the labels factor in adjustments for actual performance on the road.

By 2025, the program could cut greenhouse gas emissions from new cars and trucks nearly in two from today's levels. The proposal aims to accelerate production of electric vehicles by allowing manufacturers to count them as zero emissions vehicles. While this could be an effective incentive, it will increase gasoline vehicles' emissions by more than the electric vehicles will reduce them. "Electric vehicles are oil-free and typically quite efficient," said Langer. "But as these vehicles reach the market in greater numbers, we cannot afford to ignore the power plant emissions associated with vehicle charging."

A full proposal from the Department of Transportation and the Environmental Protection Agency is expected in early fall, with a final rule to follow in the summer of 2012.

About ACEEE: The American Council for an Energy-Efficient Economy is an independent, nonprofit organization dedicated to advancing energy efficiency as a means of promoting economic prosperity, energy security, and environmental protection. For information about ACEEE and its programs, publications, and conferences, visit

Ceres Releases Statement on Fuel Efficiency Agreement, Results of New Report Showing Economic Benefits of Strong MPG

Strong fuel efficiency/GHG standards would create nearly 700,000 jobs nationwide, including 63,000 jobs in auto sector; Consumers would save $152 billion at the pump

BOSTON – As President Obama announces the next round of a coordinated national program to improve fuel efficiency for model year 2017-2025 cars and light-duty trucks, Ceres, a national coalition of investors and public-interest organizations, today released "More Jobs Per Gallon," an economic analysis by the independent firm Management Information Services, Inc. that quantifies what stronger fuel economy/GHG standards would mean for the U.S. economy.

"We commend the Obama Administration on today's important step to boost fuel economy and reduce vehicle emissions, which will create jobs, drive innovation, save consumers money and reduce our dependence on foreign oil," said Mindy S. Lubber, president of Ceres. "Our report makes clear that the stronger the standards, the greater the economic benefits, and we urge the Administration to ensure a strong national program."

Ceres' new report, available at, evaluated different regulatory scenarios under consideration for CAFE mileage and GHG emissions improvements – specifically, improvements of three, four, five and six percent per year for model years 2017-25.

Among the report's key findings:
· The six percent scenario (roughly 60 MPG) would generate an estimated $152 billion in fuel savings for consumers in 2030 compared to business as usual. Of the $152 billion saved at the pump, $59 billion would be expected to be spent in the auto industry as drivers purchase cleaner, more efficient vehicles. The remaining $93 billion will be spent across the rest of the economy, boosting consumers' discretionary income for everything from retail purchases to restaurant trips to increased spending on health care.

· Nearly 700,000 new full time jobs would be created under the six percent scenario, compared to only about 350,000 jobs under the three percent (roughly 47 MPG) scenario.

· 63,000 new, full-time domestic auto industry jobs would be created in 2030 under the six percent scenario; more than double the 31,000 jobs under the three percent scenario.

· States seeing the biggest gains in terms of relative impact on their job markets also have some of the largest auto industry sectors. Again, job growth would be significantly higher under the six percent scenario. The top 12 states in terms of percentage job increases include Indiana, Michigan, Alabama, Kentucky, Tennessee, Ohio, North Carolina, New Hampshire, Vermont, Oregon, New York and Missouri.

· Net jobs gains in 49 states, and greatest job gains under strongest standards. Each of the four regulatory scenarios analyzed would bring substantial economic and job benefits for the U.S. economy in 2030.

· Effects on state GDPs would be overwhelmingly positive. States seeing the biggest percentage GDP gains under the strongest fuel efficiency standard have large auto industry sectors. The biggest gainers would be Michigan and Indiana, followed by Kentucky, South Carolina, Tennessee, Wisconsin, Iowa, Ohio, Alabama and Oregon. Compared to the three percent scenario, the six percent scenario would bring 382,000 more jobs, a $15.7 billion increase in gross economic output (sales), $10.3 billion more in personal income, and $9.5 billon more in tax revenue for cash strapped federal, state and local governments.

For more details and to read the full report, visit:

About Ceres: Ceres is a national coalition of investors, environmental groups and other public interest organizations working with companies to address sustainability challenges such as climate change.

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