Detroit goes green? Carmakers must average 54.5 miles per gallon by 2025

Automakers must improve their mileage every year, up to a fleet-wide average of 54.5 mpg in 14 years. Green groups praise the new regulations, while opponents call them job-killers.

The White House and automakers are expected to formally announce Friday a new agreement to raise auto mileage standards annually until they reach 54.5 miles per gallon by 2025, according to groups briefed on details of the changes.

In April, automakers and the Obama administration finalized the first increases in vehicle fuel economy standards in two decades – a rule that hiked fleet mileage to 35.5 miles per gallon by 2015. The next month, they agreed, in principle, to take the next step. That rule – expected to be finalized a year from now – would set standards to apply to vehicles built between 2016 and 2025.

Officials at the Alliance of Automobile Manufacturers were not commenting on the deal. Environmentalists briefed today on the deal outlines were cautiously optimistic.

"What we're hearing today sounds like a very positive development," says Michelle Robinson, clean vehicles program director for the Union of Concerned Scientists in Washington. "We think the technology exists to save even more fuel and reduce pollution. But overall, we're pleased at the direction this is taking."

The new standards represent a compromise for environmentalists, who had pushed for standards to be raised to 62 mpg by 2025. Automakers initially responded that 45 mpg was the highest they could go, saying the tougher standards would hammer profits and require building mainly electric and hybrid vehicles.

The administration and the National Highway Transportation Safety Administration (NHTSA) are required under the 2007 energy act to develop standards for 2025. The auto industry joined the discussions, eager to attain a single national standard agreed to by California – thereby eliminating the possibility of state-by-state standards – and to better coordinate drive-train development.

The new standards, according to the Natural Resources Defense Council, include:

• An overall standard of 54.5 miles per gallon (mpg) – representing about a 40 percent reduction in fuel consumption and a 50 percent cut in carbon pollution from today’s vehicles.
• A 5 percent annual mileage improvement for cars from 2017 to 2025. Light trucks, including SUVs, would be allowed a slower rate of improvement – 3.5 percent annually from 2017 to 2021, and 5 percent annually for 2022 to 2025. The exception for light trucks over that five-year period is the reason why the originally-proposed 56.2 mpg is now 54.5 mpg.
• A midterm review, by spring 2018, to assess whether the standards are on track. That joint assessment – by EPA, NHSTA, and the California Air Resources Board – will be used by EPA to determine if any changes are needed.
• Extra mileage credits for mild-hybrid and strong-hybrid pickups.
• Special credits for technologies such as louvered grills, solar roof cells, and capturing thermoelectric waste from exhaust.
• A cap on the number of electric vehicles considered zero-emissions.

The agreement comes on the heels of intense media battles between green groups and automakers, who aired advertisements in 14 states that claimed the new standards would hurt job creation. Meanwhile, legislators sent letters of their own to the administration.

Some in Congress were quick to praise the new deal.

“These new fuel efficiency standards represent the single greatest step our country has taken to reduce our dependence on foreign oil and to encourage a new generation of advanced vehicle technology entrepreneurs," said Rep. Ed Markey (D) of Massachusetts in a statement. "For the next decade and a half consumers will pay less to go farther on every tank of gas ... cutting oil imports and pollution."

But environmentalists remain cautious, waiting to see "the loopholes" – and if the industry will drive a truck through them – during the rule-writing process of the next year.

“We have not seen a final document yet, but based on what we have heard so far, the White House is taking a strong step toward lowering drivers' gas bills and cutting dangerous pollution," says Roland Hwang, transportation program director for the Natural Resources Defense Council. "But we need to run the numbers before we give our seal of approval."