Biden Administration Proposes Hike In Fuel Economy Standards

By Charles Kennedy - Jul 31, 2023

The Biden Administration is proposing raising the fuel economy standards for passenger vehicles and light trucks by 2032 in an effort to reduce fuel consumption and emissions.  

The U.S. Department of Transportation’s National Highway Traffic Safety Administration (NHTSA) proposed fuel economy standards for passenger cars and light trucks and fuel efficiency standards for model years 2027-2031 that increase at a rate of 2% per year for passenger cars and 4% per year for light trucks. NHTSA is also proposing new fuel efficiency standards for heavy-duty pickup trucks and vans (HDPUVs) for model years 2030-2035 that increase at a rate of 10% per year.

NHTSA currently projects that the proposed standards would require an industry fleet-wide average for passenger cars and light trucks of roughly 58 miles per gallon (mpg) in model year 2032 and an industry fleet-wide average for HDPUVs of roughly 2.6 gallons per 100 miles in model year 2038.  

The proposal is now open to comments for 60 days.

If finalized as proposed, NHTSA estimates that the combined benefits of the new standards would exceed costs by more than $18 billion. In addition, according to NHTSA, “the updated standards would save Americans hundreds of dollars at the pump, all while making America more energy secure and less reliant on foreign oil.”

Commenting on the new proposed fuel economy standards, U.S. Transportation Secretary Pete Buttigieg said in a statement,

“Better vehicle fuel efficiency means more money in Americans’ pockets and stronger energy security for the entire nation.” 

This proposal is not as stringent as the April proposal from the Environmental Protection Agency (EPA) which proposed the toughest-ever tailpipe emission standards for new cars and trucks, aiming to accelerate the adoption of electric vehicles to the point of EVs becoming a larger portion of new sales than conventional vehicles by 2032.

John Bozzella, president and CEO of Alliance for Automotive Innovation, said, commenting on NHTSA’s fuel economy proposal, “At first glance it appears NHTSA tried to sync up these fuel economy rules with EPA’s 2027-2032 greenhouse gas emissions rules (with which we’ve already raised concerns).”

“The best policy would be a return to a single national standard to reduce carbon in transportation – one vehicle fleet and one national standard,” Bozzella added.  

By Charles Kennedy for Oilprice.com