INTERNATIONAL BUSINESS NEWS
August 29, 2012 12:00:00 AM
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The Obama administration issued national fuel economy rules Tuesday that require the new cars and trucks in 2025 to average nearly double the fuel mileage of 2012 model vehicles.

President Barack Obama said the new fuel economy standards "represent the single most important step we've ever taken to reduce our dependence on foreign oil."

"This historic agreement builds on the progress we've already made to save families money at the pump and cut our oil consumption," Obama said.

The rules will increase fuel economy to an average of 54.5 miles per gallon (23.2 kilometers per liter, or 4.32 l/100 km) for cars and light-duty trucks by model year 2025.

In 2011, the standard was an average 27.3 miles per gallon.

"The standards will nearly double the fuel efficiency of those vehicles compared to new vehicles currently on our roads," the National Highway Traffic Safety Administration (NHTSA) said.

Combined with previous standards set by the Obama administration, the moves will save consumers more than $1.7 trillion in gasoline costs and reduce US oil consumption by 12 billion barrels, the administration said.

Proposed by Obama in July 2011, the final rules for the 2025 Corporate Average Fuel Economy (CAFE) standards were developed by the NHTSA and the Environmental Protection Agency.

The process to establish the standards included consultations with automakers, the United Auto Workers union, states, consumer groups and environmental and energy experts.

Last year, 13 major automakers -- which combined account for more than 90 percent of all vehicles sold in the United States -- announced their support for the new standards.

The standards are a key component of the Obama administration's energy policy, and would bring the nation over halfway to his goal of reducing oil imports by a third by 2025.

The program builds on initiatives unveiled in May 2009 that were aimed at both increasing gas mileage and decreasing greenhouse gas pollution for new cars and trucks -- the first such policy at the national level.

The new efficiency standards would push automakers to develop new engine technologies and provide incentives for alternative-energy vehicles, such as electric vehicles and plug-in hybrids.

The combined CAFE standards will cut greenhouse gas emissions from cars and light trucks in half by 2025, the administration said.

Over the life of the program, emissions will be reduced by six billion metric tons, more than the total amount of carbon dioxide emitted by the United States in 2010.

The United Auto Workers said the new rules were a win-win for consumers and the auto industry.

"These new standards will help propel the auto industry forward by giving American families long-term relief from volatile fuel prices," Bob King, UAW president, said in a statement.

"Lowering the total cost of driving will make automobiles more affordable and expand the market for new vehicles," King said.

But Mitt Romney, Obama's presumptive Republican opponent in the November 6 election, has opposed the new CAFE 54.5 mpg requirement by 2025.

In June, Romney told the Detroit News newspaper that he would seek "a better way of encouraging fuel economy" than CAFE mileage requirements "as the sole or primary vehicle."

Edmunds.com, a leading automotive website said the standards may hurt the industry by pushing technological demands beyond automakers' ability to deliver.

"The smarter way to approach it is to let the market guide vehicle fuel-efficiency standards," said Jeremy Anwyl, Edmunds.com vice chairman.

Consumers have shown a willingness to buy fuel-efficient cars, but not at the expense of other features like comfort, space and performance, he said.

"CAFE risks requiring automakers to build vehicles and adopt technologies that consumers may not want to buy."

AFP

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