No, the Feds did not just Weaken Fuel Economy Standards

, senior vehicles analyst | July 19, 2016, 3:00 pm EDT
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Yesterday, federal and state regulators released a technical paper on the 2025 fuel economy standards. Despite not being a new regulation—it’s essentially a research document—I woke up today to headlines like “EPA admits defeat on toothless 54.5 mpg decree,” “54.5 mpg target is off the table, U.S. regulators say,” and “Feds: Automakers may not meet fuel economy target.” So what is it everyone is getting wrong?

The standards aren’t a mandate, and remain unchanged

As I’ve noted tirelessly, “54.5 mpg” was not a target, regulatory or otherwise; it is not a hard prediction of the rule; it is, in fact, nothing binding whatsoever.

The standards don’t set a mandated target—that’s not how they work. Instead, they are actually a series of curves that dictate, for each size and type of vehicle, an individual fuel economy target. The regulation is designed to make sure all models of vehicles get more fuel-efficient over time.

Based on the market when the rules were introduced, the agencies estimated a fleetwide average target of 54.5 mpg-equivalent in 2025.  As one would expect, projections change over time given more data. The report the agencies released yesterday projects, with the exact same rules as before, a fleetwide target of 50.8 mpg.

This isn’t surprising in the slightest—people are buying more trucks and SUVs. But the regulations themselves remain unchanged.

These are the targets for cars and trucks in 2025, not 54.5 mpg. And automakers are well on their way to achieving them, with more technology options and at reduced costs according to yesterday’s report.

These are the targets for cars and trucks in 2025, not 54.5 mpg. And automakers are well on their way to achieving them, with more technology options and at reduced costs according to yesterday’s report.

The rule was designed—in cooperation with auto manufacturers—to reflect consumer choice. It made it possible for consumers to be able to buy more efficient vehicles in every size and type of vehicle. That’s what the rule is doing, and will continue to do, as long as we resist efforts to weaken or roll back the standards.

But come on, what about 54.5?

One major implication of the fact that people are buying more trucks and SUVs is that emissions as a result of the standards currently in place will not be as low as we first thought. However, that change in the market—potentially falling short of an estimated goal—does not mean that automakers can’t comply with the law, or that the law should be changed, despite what auto-industry trade groups say. This report doesn’t write the future in stone. It kicks off of a mid-term evaluation of these standards, the outcome of which will be to either 1) strengthen, 2) weaken, or 3) leave unchanged the standards for 2025.

This means that, in fact, we could still achieve a fleetwide average target of 54.5 mpg-equivalent in 2025—but to do so will require strengthening the standards now on the books. The TAR is a first step: it says quite clearly that “A wider range of technologies exist for manufacturers to use to meet the MY2022-2025 standards, and at costs that are similar or lower, than those projected in the 2012 rule.” On top of this, we know that manufacturers are actually ahead of the curve already, overachieving current standards.

This is all a strong indication that the administration could justifiably strengthen the standards. The 54.5 mpg-equivalent goal is not the trajectory we are currently on…but it could be.

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