President Obama Announces New CAFE Standards

Source: Cozen O’Connor’s Energy, Environmental and Utilities Group “News Concerning Recent Developments in Energy and Environmental Law” Newsletter, August 16, 2011

On July 29, 2011, President Obama unveiled the largest increase in corporate average fuel economy (CAFE) standards since the 1970s. While the proposal must now enter the interagency review process, the administration hopes to announce new finalized standards by September 30, 2011. The new CAFE rule will ultimately require an average fuel economy of 54.5 miles per gallon (mpg) by 2025.

CAFE was last tightened in 2007 by President Bush. Those standards required automobile manufacturers to achieve a corporate average of 36 mpg by 2016. President Obama’s new proposal will require cars to achieve a 5 percent annual improvement every year from now until 2025. Light-duty trucks (including SUVs) will be required to improve 3.5 percent annually until 2021, and then 5 percent annually until 2025. More information on the president’s announcement can be found here.

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