From AAIA Capital Report
WASHINGTON, D.C. — The Environmental Protection Agency (EPA) and the National Highway Traffic Safety Administration (NHTSA) jointly announced on April 1 new motor vehicle greenhouse gas emission limits and fuel economy requirements. Under the final rule, which will be published soon in the Federal Register, cars and light trucks will need to achieve a vehicle emission level of 250 grams of carbon dioxide per mile by 2016. In addition, the new rule requires cars and light trucks to meet a 35.5 miles per gallon (mpg) standard by 2016, up from the current combined standard of 25 mpg.
The Obama administration claims that the new rules could "potentially save the average buyer of a 2016 model year car $3,000 over the life of the vehicle and nationally, will conserve about 1.8 billion barrels of oil and reduce nearly a billion tons of greenhouse gas emissions over the lives of the vehicles covered." The rule was the result of a 2009 agreement between car companies, the state of California and the White House, where the federal government would adopt the California standards and the state would then agree to accept compliance with those standards as then meeting their requirements.
EPA and NHTSA believe car companies will use a wide range of technologies to meet the new standards. These include engine improvements, such as use of gasoline direct injection and downsized engines that use turbochargers, the use of advanced transmissions, increased use of start-stop technology, improvements in tire performance, reductions in vehicle weight, increased use of hybrid and other advanced technologies and the initial commercialization of electric vehicles and plug-in hybrids. EPA is also projecting improvements in vehicle air conditioners, including more efficient as well as low leak systems.
Car companies hailed the new rule as an example of how states, environmental groups, industry and the federal government can work together to develop a "road map" on fuel economy and greenhouse gas standards. They called for continued cooperation in order to have one federal standard rather than multiple state and federal rules that result in "uncertainty and compliance difficulties."
Additional information on the new standards can be found by going to http://www.epa.gov/otaq/climate/regulations.htm or click here.
