U.S. EPA Strengthens Auto Fuel Emission Standards

The U.S. Environmental Protection Agency (EPA) on Dec.20 announced their most progressive federal greenhouse gas emission standards for passenger cars and light trucks. The standards introduced for passenger vehicles are based on robust scientific knowledge and established in an environment of rigorous assessment of current and future technologies, according to the agency. The EPA estimates that the final rule, which revises current standards from Model Years (MY) 2023 through 2026, has the potential to unlock $190 billion in net benefits to the U.S.

The new rule replaces the Safer Affordable Fuel-Efficient, or SAFE, rule promulgated in April 2020 to establish fuel economy and emissions standards for cars and light trucks for model years 2021 to 2026. In January, President Biden issued an executive order directing EPA to consider whether to propose suspending, revising, or rescinding the SAFE rule, which weakened an Obama-era rule that would have required increases of about 5 percent per year.

The standards are expected to also have significant fuel economy savings, with the EPA projecting average fuel economy label values of 40 miles per gallon (mpg) by MY2026, compared to 32mpg expected from the previous standards (the SAFE rule standards). The stringency of the new standards increases at a rate of 5-10 percent annually from 2023 through 2026 compared to the previous standards that had set a rate of about 1.5 percent. Further benefits include reducing climate pollution and  improving public health.

The announcement by the EPA is a significant step forward, in the US reaching its net zero emissions goal by 2050. As part of the goal set out by President Biden, an all-electric, zero emissions transportation future is paramount. Furthermore, the standards are cost effective and achieve significant public health and welfare benefits.

In addition, the standards provide adequate lead time for manufacturers to comply with emission targets at reasonable costs. Analysis conducted by the EPA shows manufacturers can comply with the final standards set out, with only a modest increase of 17 percent in the number of electric vehicles entering the fleet.

The U.S. aims to achieve substantial GHG emission reductions in the transportation sector in the long term and has supported the electrification of the transport sector by investing heavily in electric vehicle charging stations. The Bipartisan Infrastructure Law enacted last month aims to have 500,000 public charging stations by 2030, with a focus on creating a convenient national network and providing easy access to rural drivers. Additionally, the law has set aside $7 billion for investments in battery manufacturing that will power the future vehicles in the US.