President Barack Obama Announces National Fuel Efficiency Policy

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President Barak Obama recently set in motion a new national policy aimed at both increasing fuel economy and reducing greenhouse gas pollution for all new cars and trucks sold in the United States.

The new standards, covering model years 2012-2016, and ultimately requiring an average fuel economy standard of 35.5 mpg in 2016, are projected to save 1.8 billion barrels of oil over the life of the program with a fuel economy gain averaging more than 5 percent per year and a reduction of approximately 900 million metric tons in greenhouse gas emissions. This would surpass the CAFE law passed by Congress in 2007, which required an average fuel economy of 35 mpg in 2020.

"In the past, an agreement such as this would have been considered impossible," said President Obama. "That is why this announcement is so important, for it represents not only a change in policy in Washington, but the harbinger of a change in the way business is done in Washington. As a result of this agreement, we will save 1.8 billion barrels of oil over the lifetime of the vehicles sold in the next five years. And at a time of historic crisis in our auto industry, this rule provides the clear certainty that will allow these companies to plan for a future in which they are building the cars of the 21st century."

This groundbreaking policy delivers on the President's commitment to enact more stringent fuel economy standards and represents an unprecedented collaboration between the Department of Transportation (DOT), the Environmental Protection Agency (EPA), the world's largest auto manufacturers, the United Auto Workers, leaders in the environmental community, the State of California, and other state governments. 

A national policy on fuel economy standards and greenhouse gas emissions is welcomed by the auto manufacturers because it provides regulatory certainty and predictability and includes flexibilities that will significantly reduce the cost of compliance. The collaboration of federal agencies also allows for clearer rules for all automakers, instead of three standards (DOT, EPA and a state standard).