Title: Corporate Average Fuel Economy (CAFE) Standards
1Corporate Average Fuel Economy (CAFE) Standards
- Jennifer Alexander
- Spring 2008
2Outline
- Energy Policy Conservation Act of 1975
- CAFE Program and how it is administered
- How standards are calculated
- Light Truck program
- New Light truck standards
- Energy Independence and Security Act of 2007
3Energy Policy Conservation Act 49 USC 329
- Passed in 1975, in response to Arab oil embargo
- In 1974, average passenger car fuel economy was
12.9 mpg - Title V Improving Automotive Efficiency
- Established CAFE standards for passenger cars
for model year (MY) 1978-MY1980 and 1985 and
beyond, and for light trucks beginning in MY1979. - Standards in 1978 were to be 18 mpg, 19 mpg in
1979, 20 mpg in 1980 and 27.5 in 1985, which has
remained constant until today - Secretary of Transportation (DOT) set standards
for interim years of 81-84 - Goal was to double new car fuel efficiency by
1985
4Who Administers the Program?
- EPCA granted National Highway Transportation
Safety Administration (NHTSA), part of the
Department of Transportation, the authority to
administer the CAFE program. - EPCA (Congress) set standards for passenger cars.
- NHTSA has the authority to set standards for
other classes of vehicles, including light
trucks. - After 1985, Secretary of Transportation has
discretion to adjust passenger car standard
within range of 26.0 and 27.5mpg. An increase
above or below requires Secretary to issue
amendment which is in force until Congress
disapproves.
5- Secretary has much broader discretion with
regards to light trucks. Congress set no
specific standards, and left it up to DOT - NHTSA also does things such as establishes and
amends standards, promulgates regulations
regarding CAFE procedures, enforces standards,
considers petitions for exemptions, collects
manufacturers reports, and more. - EPA has responsibility for calculating fuel
economy for each manufacturer
6Maximum Feasible Fuel Economy Standards
- EPCA dictates that DOTs determination to change
standards must be made in consideration of 4
factors - Technological Feasibility
- Economic Practicability
- Effect of other standards on fuel economy and
- Need of the nation to conserve energy
- 49 USC 32902(a)
7- Cafe Standard is
- a performance standard specifying a minimum
level of average fuel economy applicable to a
manufacturer in a model year - 49 USC 32901(a)(6)
- Automobile is defined
- A four wheeled vehicle that is propelled by
fuel, or by alternative fuel, manufactured
primarily for use on public streets, roads, and
highwaysand rated at - Not more than 6,000 lbs gross vehicle weight, or
- More than 6,000 pounds GVW, if the secretary
decides by regulation that- - An average fuel economy standard under this
chapter is feasible, and - the vehicle is substantially used for the
same purposes as a vehicle rated at not more than
6,000 lbs GVR - 49 USC 32901(a)(3)
8- Passenger Automobile
- Automobile that the Secretary decides by
regulation is manufactured primarily for
transporting not more than 10 individuals, but
does not include an automobile capable of
off-highway operation that the Secretary decides
by regulation- - Has a significant feature (except 4-wheel drive)
designed for off-highway operation and - Is a 4-wheel drive automobile or is rated at more
than 6,000 pounds GVWR - 49 USC 32901(a)(16)
- Light truck (set out in regulations, not EPCA)
- Automobile other than a passenger automobile
which is either designed for off-highway
operation, or - Is rated at more than 6,000 lbs GVW and
- That has at least four of the following
characteristics affecting off road capability
relating to approach angle, breakover angle,
departure angle, running clearance, and front and
rear axle clearance
9CAFE Calculation
- Two-Fleet Rule Domestic and foreign produced
cars measured separately, each must meet standard - No such two-fleet rule for light trucks
- Fleet average is a sales weighted mean
- Compliance is measured by using harmonic mean
calculation
Fleets Fuel Economy
10How is fuel economy determined?
- 3 sets of calculations NHTSAs figures, EPAs
unadjusted dynamometer values, and EPAs adjusted
on-road values. - EPA does laboratory tests that measure emissions,
and based on amount of carbon emitted during the
test they determine the fuel economy. - Adjusted values are the ones currently listed on
new car labels, they are adjusted for a number of
factors. - EPA used to perform tests in 75 weather, with
acceleration and speeds lower than average driver
uses, and without accessories turned on (AC,
radio).
11Ann Arbor, MI
Chevy Silverado being tested in dynamometer
12EPAs new fuel economy stickers
- New test methods (appearing on MY2008 stickers)
will bring estimates closer to actual fuel
economy by factoring in 1) high speeds and
quicker accelerations, 2) air conditioning use,
3) and driving in cold temperatures, as well as
road conditions, tire pressure, load, and
different fuels. - Beginning in 2011, labels will be required on
certain vehicles up to 10,000 lbs GVWR - Labels are redesigned to make it easier for
consumers to compare vehicles - In 2011, more vehicle specific testing to be
done, for vehicles most sensitive to the 3 new
adjustments
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14Penalties
- If average fuel economy of a manufacturers
fleet falls below the standard, manufacturer must
pay penalty of 5.50 per 0.1 mpg below the
standard, times the total number of vehicles in
fleet for that model year in violation - Since 1983, over 675M in penalties paid
- Most European manufacturers regularly pay, Asian
and the big domestic companies have never paid
fines. - In 2006, Maserati, BMW, Porsche, Volkswagen, and
DaimlerChrysler (30M) all paid fines in excess
of 1M (and Ferrari paid 850K)
15Offsets
- Manufacturers can earn credits for any year they
exceed the standard for that fleet - Credits can be banked for up to three years
- Offsets can be used to cover penalties up to
three years - The amount of credit a manufacturer earns is
determined by multiplying the tenths of a mile
per gallon that the manufacturer exceeded the
CAFE standard in that model year by the amount of
vehicles they manufactured in that model year - Carry Back Plan can be used to avoid
penalties when manufacturer is in violation and
has no credits. Must submit plan to NHTSA
detailing what manufacturer plans to do in the
next 3 years to make up the current deficit
16Alternative Fuel Vehicles
- 49 USC 32905- Manufacturing incentives for
alternative fuel automobiles - Dual fuel calculation used as incentive to
develop alternative fuel vehicles. - Dual fuel vehicles can take advantage of this
credit, even though less than 1 of the fuel used
in E85 capable vehicles is E85.
17Alternative Fuel Vehicles
- - For vehicles that use only an alternative
fuel, - fuel economy is calculated by dividing its fuel
- economy in equivalent miles per gallon of
- gasoline or diesel fuel by 0.15. So a Car that
gets - 15 mpg alternative fuel is equal to 100 mpg gas
- Dual Fuel Vehicles average of fuel
- economy on gasoline/diesel with fuel economy on
alternative fuel, divided by 0.15. 1/0.5/(mpg
gas) 0.5/(mpg alt fuel) 1/0.5/25 0.5/100)
fuel economy for duel fuel vehicle - Natural gas vehicles - weighted average on using
natural gas and gasoline/diesel. Alternative
Motor Fuels Act says that 1003 ft of natural gas
is equal to 0.823 gallons of gasoline. Same 0.15
equivalency to gasoline for natural gas. For a
car that gets 25 mpg for natural gas - CAFE FE (25/100) (100/.823)(1/0.15) 203 mpg
18Light Trucks
- Originally light trucks were up to 6,000 lbs
gross vehicle weight rating (GVWR). - As of 1980 light truck standards are for trucks
up to 8,500 lbs GVWR - Before 1992, there was a two-fleet rule for
LDTs 4-wheel drive and 2-wheel drive LDTs
measured seperately. - In MY1979, first year of LDT standards, standard
was 17.2 for 2-wheel and 15.8 for 4-wheel drive. - Standard progressively increased to 20.7 in 1996,
when DOT Appropriations included a prohibition
against making any adjustments past 20.7mpg
19Change in LDT standard
- In conference on 2001 DOT appropriations bill,
Senate insisted the freeze on LDT CAFE standard
be dropped - This opened the way for NHTSA to begin rulemaking
to increase LDT standard again - In December 2002, believing that some
manufacturers may be able to achieve higher CAFE
performance than they currently project1, NHTSA
proposed a rule increasing LDT CAFE to 21.0 mpg
in MY2005, 21.6 mpg in MY2006, and 22.2 mpg in
MY2007. - On April 3, 2003, NHTSA adopted this proposed
rule.
20New Light Truck Rules (MY2008-2011)
- In April 2006, NHTSA issued a Final Rule
increasing stringency of LDT program standards,
and restructuring the way the standards are
calculated Reformed Standards - First phase of new rules was to be MY2008-2011.
- Before 2011, manufacturers can choose to use
reformed or unreformed standards to calculate
compliance. Unreformed standards use current
system of single average mandated for entire
fleet. - For the first time, medium-duty passenger
vehicles, vehicles between 8,500 GVW and 10,000
GVW will be subject to CAFE standards.
21Unreformed CAFE standards up to 2011
22Reformed Standards for LDTs
- Fuel Economy standard no longer one uniform
number, but based on footprint of car- product
of vehicles wheelbase (distance between the
centers of the axels) and its track width
(distance between center line of the tired) - Using continuous mathematical formula, in which a
target fuel economy would be set for each
increment in footprint
Incremental fuel economy standard in final rule
23- Smaller footprint trucks had higher targets,
larger footprint trucks had lower fuel economy
targets - Manufacturers mandated fuel economy is
calculated based on sales weighted average of
targets for each vehicle line. - Manufacturers who make more small trucks would
have to meet a higher standard, and those who
make primarily large trucks would have to meet a
lower overall standard - No particular overall standard a manufacturer had
to meet. No specific vehicle is required to meet
specific fuel economy, only required that average
meets standard that is based on the overall fleet
mix
24Proposed Reformed CAFE Standards (miles per
gallon) (from Notice of Proposed Rulemaking, but
not actually adopted.)
Category 1 2 3 4 5 6
Range of vehicle footprint (in square feet) lt43.0 gt43.0747.0 gt47.052.0 gt52.056.5 gt56.565.0 gt65.0
MY 2008 targets 26.8 25.6 22.3 22.2 20.7 20.4
MY 2009 targets 27.4 25.6 23.5 22.7 21.0 21.0
MY 2010 targets 27.8 26.4 24.0 22.9 21.6 20.8
MY 2011 targets 28.4 27.0 24.5 23.3 21.7 21.2
Source National Highway Traffic Safety Administration, Notice of Proposed Rulemaking, "Average Fuel Economy Standards for Light Trucks Model Years 2008-2011," 49 CFR Parts 523, 533 and 537, Docket no. 2005-RIN2127-AJ61. Source National Highway Traffic Safety Administration, Notice of Proposed Rulemaking, "Average Fuel Economy Standards for Light Trucks Model Years 2008-2011," 49 CFR Parts 523, 533 and 537, Docket no. 2005-RIN2127-AJ61. Source National Highway Traffic Safety Administration, Notice of Proposed Rulemaking, "Average Fuel Economy Standards for Light Trucks Model Years 2008-2011," 49 CFR Parts 523, 533 and 537, Docket no. 2005-RIN2127-AJ61. Source National Highway Traffic Safety Administration, Notice of Proposed Rulemaking, "Average Fuel Economy Standards for Light Trucks Model Years 2008-2011," 49 CFR Parts 523, 533 and 537, Docket no. 2005-RIN2127-AJ61. Source National Highway Traffic Safety Administration, Notice of Proposed Rulemaking, "Average Fuel Economy Standards for Light Trucks Model Years 2008-2011," 49 CFR Parts 523, 533 and 537, Docket no. 2005-RIN2127-AJ61. Source National Highway Traffic Safety Administration, Notice of Proposed Rulemaking, "Average Fuel Economy Standards for Light Trucks Model Years 2008-2011," 49 CFR Parts 523, 533 and 537, Docket no. 2005-RIN2127-AJ61. Source National Highway Traffic Safety Administration, Notice of Proposed Rulemaking, "Average Fuel Economy Standards for Light Trucks Model Years 2008-2011," 49 CFR Parts 523, 533 and 537, Docket no. 2005-RIN2127-AJ61.
25Challenge to NHTSA Final Rule
- 11 states, DC, NYC, and four public interest
organizations filed petition for review of final
rule for LDT MY2008-MY2011, in Center for
Biological Diversity v. NHTSA, 508 F.3d 508 (9th
Cir. 2007). - Challenged final rule under EPCA and NEPA.
- EPCA Arguments
- Arbitrary and capricious and contrary to EPCA
- Agency did not set CAFE standards at maximum
feasible levels. - Cost-benefit analysis done by NHTSA gave no
benefit to reducing CO2 emissions, - Using vehicle attributes to set fuel economy
standard means there is no backstop, or floor
fuel economy to meet for a given year. This will
encourage manufacturers to make bigger vehicles. - Did not address SUV loophole- allows these
vehicles to meet lower CAFE standard even though
many are built on car platforms and serve same
function as passenger cars.
26- Argued under NEPA that the final rule failed to
take a hard look at the GHG implications of its
rulemaking and they failed to look at rules
cumulative impact. - NHTSA must prepare EIS, not just EA
279th Circuit overturns NHTSA rules
- Court found rules arbitrary and capricious and
contrary to EPCA - Court agreed with possibility of having no
backstop on truck size would continue to permit
upsizing, and failed to prevent trucks from
emitting more CO2 than in previous years - The decision not to address the SUV loophole
was arbitrary and capricious, it was contrary to
the language of the law.
- NHTSA incorrectly set value of 0 to global
warming damage caused by truck usage
28- NHTSA rules also failed to promulgate fuel
economy standards for vehicles weighing
8,500-10,000 lb GVW, nor did they show that there
was a validly reasoned basis for not doing so.
- Environmental Assessment done was inadequate
- These rules may in fact have a significant impact
on the environment - 9th Circuit returned the rules to NHTSA, saying
that they must make new standards as
expeditiously as possible and fully evaluate
the impacts of these standards on the environment
29Energy Independence and Security Act of 2007
- P.L. 110-1040
- Omnibus energy policy law aimed as increasing
energy efficiency and renewable energy
availability. - Titles I-XVI
.
- President Bush signed EISA into law December 19,
2007
30Highlights of EISA
- Title I- Energy Security Through Improved Vehicle
Fuel Economy - Title II Biofuels
- Title III - Standards for appliances and lighting
- Title VI Research and Development
- Title VII Carbon Capture and Sequestration
- Title X Green Jobs
- Title XI Energy Transportation and
Infrastructure - Title XII Small Business Energy Programs
31Title I Fuel Economy
- Statute sets a 35 mpg standard for both passenger
cars and light duty trucks by 2020 - Although cars and trucks must meet the same
standard, they are still measured separately. - Can use attribute-based standards, which Bush
administration says will ensure increased fuel
economy doesnt come at the expense of safety
32April 22 Update(Earth Daycoincidence?)
- Administration announced interim standards for
2015 of 31.5 mpg (combined) - Will force auto makers to speed up their
development of more fuel efficient vehicles. - 4.5 percent increase per year from 2011-2015
- Would be a 25 percent increase by 2015 (EISA
requires 40 by 2020) - DOT took carbon dioxide into account in its costs
and benefits analysis - Manufacturer standard would be based on type of
vehicles they sell, based on vehicle attributes - Manufacturers can sell credits
33Conclusions and Implications for Future
- Do regulations affect consumer choice? Or do gas
prices? - Will better fuel economy mean more driving,
possibly negating advances in fuel economy? - How much will auto industry to do prevent further
increases, since they make more money off larger
cars? - Safety Impacts? Are smaller cars really
inherently less safe? Or do lower fuel economy
standards for trucks just allow automakers to
make heavier cars, making it less safe for
drivers of small cars? Will increased standards
help move towards evening out auto weights across
fleet lines?
34Implications and thoughts (contd.)
- Should the timetable set have been shorter? Are
auto manufacturers given too much time to comply? - Will a uniform standard for passenger cars and
light trucks mean the end of SUVs and minivans?
These cars were created in response to CAFE
standards, because standards for light duty truck
were lower and these autos could fit into this
new category. - Is it possible that rather than causing all the
doomsday situations opponents of tighter
standards predict, that these standards will
finally force automakers to increase the
technology of engines, something many say should
have been done years ago, and actually
effectively effectuate Congresss goals?
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