June 25, 2007


U.S. Senate passes energy bill but compromises on CAFE

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Chevrolet Volt concept
Chevrolet Volt concept. Click image to enlarge

Chevrolet Volt concept at the Detroit Auto Show–>

Washington, D.C. – The U.S. Senate has passed an energy bill by a vote of 65-27, which includes a compromise version of Corporate Average Fuel Economy (CAFE), according to a report by the Green Car Congress. The legislation increases new light-duty vehicle fleet-wide fuel economy to an average 35 mpg (6.7 L/100 km) by 2020, but eliminates the mandatory 4 per cent per year increase thereafter that had been part of the original proposal.

The bill also removes an earlier provision that mandated 50 per cent of cars be flex-fuel in 2012, increasing to 80 per cent in 2015. The new language calls for ensuring that 50 per cent of vehicles sold in the U.S. by 2015 be alternative fuel, including but not limited to flex-fuel, hybrids, electric vehicles, fuel cells and others. The bill will now move to the House. Major provisions of the act include:

  • An increase in fleet-wide average fuel economy for all cars, SUVs and trucks up to 10,000 lbs (4,536 kg) by 10 mpg from model years 2011 to 2020.
  • The rules will use attribute-based classes, such as size or weight, determined by NHTSA. Each class of vehicle will be required to meet the new fuel economy standard for that particular class to achieve the fleet-wide average of 35 mpg; each automaker will no longer be required to average the fuel economy for the entire fleet of cars they produce.
  • From 2011 to 2019, NHTSA must set fuel economy standards that are the maximum feasible, and ratchet these standards up to meet the 2020 target of 35 mpg. In 2020, the total average must meet 35 mpg, unless NHTSA determines that the standard would not be cost-effective of the nation. The bill defines “cost-effective” to mean that the value to the U.S. of reduced fuel use from the standard is greater than, or equal to, the cost to the U.S. of such a standard. From 2021 to 2030, NHTSA must set fuel economy standards that are the maximum feasible, and ratchet them up at a reasonable rate.
  • A credit system and trading program will be established and run by the NHTSA, allowing automakers to sell credits if it exceeds the standards, or bank them for up to five years; automakers who cannot meet the standards can purchase credits, use banked credits, or borrow from projected surpluses from future years.
  • Creation of a consumer labelling program that also includes greenhouse gas emissions.

  • The bill requires NHTSA to issue a final rule by 2018 to create safety standards that address the differences between the largest and smallest vehicles.

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