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New Regs Seek 5% Annual Boost In Efficiency Through 2016

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Barack Obama

Barack Obama

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Yesterday, President Obama unveiled the new auto emissions and efficiency standards that we've been expecting since last week. Those regulations, which kick in during the 2012 model year, require an annual boost in fuel efficiency of around 5%, with a target of reaching 35.5 mpg by calendar year 2016. (That's from a starting point of 27.3 mpg in the 2011 model year.)

Of course, those efficiency figures represent fleetwide averages. Cars will have higher standards, ranging from 33.6 mpg in 2012 to 38 mpg in 2016. Light trucks have it slightly easier, with a planned efficiency increase from 25 mpg to 28.3 mpg by model year 2015.

Along with those efficiency thresholds, the joint regulations from the Department of Transportation and Environmental Protection Agency also detail new emissions standards: by model year 2015, fleets are expected to average 250 g of CO2 per mile. (Sadly, the document outlining these regulations doesn't tread quite so lightly, clocking in at a hefty 1,227 pages.)

So far, the reaction to Obama's announcement from automakers and environmental groups has been largely positive. Automakers in particular are happy to see one set of efficiency and emissions regulations that covers the entire U.S., rather than the patchwork code that was beginning to take shape after California received permission from the EPA to set its own standards. Speaking to GM plant workers in Lordstown, Ohio, the president said, "For too long, our auto companies faced uncertain and conflicting fuel-economy standards. That made it difficult for you to plan down the road." Obama also mentioned that owners of 2015-year vehicles will save an average of $3000 in fuel costs compared to most vehicles on the road today.

Still, some manufacturers are expected to lag on implementation of the new standards, and accordingly, they'll pay a per-vehicle fine. Those costs should range from around $500 per vehicle in 2011 to $1,500 in calendar year 2016. Interestingly, implementing fuel-efficient technology is expected to cost less than those fines: per-vehicle tech fees are projected to average $78 in 2011, growing to $1051 in 2016. In other words, installing efficient technology would seem to be in automakers' best interest. (NB: it's worth noting that automakers who sell less than 400,000 vehicles in the U.S. will be allowed subject to slightly lower standards for 25% of their fleet.)

The proposal is now subject to public comment for 60 days, after which it will be re-examined and revised. The DOT/EPA regulations will be published in final form by March 31, 2010.

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