Biden administration proposes tougher fuel standards for new vehicles starting in 2023

Aug. 16, 2021

The Environmental Protection Agency (EPA) released a regulatory proposal Aug. 5 that would cut greenhouse gas emissions from new passenger cars and light trucks for the four model years starting in 2023.

EPA estimated that as the newer vehicles become a larger percentage of the vehicle market over time, the changes should eventually reduce US gasoline consumption by 9.9% when compared with recent consumption.

“By 2050, our proposal would reduce gasoline consumption by more than 290 million barrels—a nearly 10% reduction in US gasoline consumption,” the proposed rule says. US gasoline consumption in 2020 was about 2.94 billion bbl, according to the Energy Information Administration.

The reduction in gasoline consumption would be only 1.5% in 2026 from 2020 levels, by EPA’s calculation. Such estimates typically cannot easily take into account other impacts on consumption, such as the effects of an increase in the overall economic activity or more stringent emission regulations than those currently proposed.

Fuel efficiency standards

EPA said the proposed tighter standards for greenhouse gas emissions and some other emissions would cut those emissions by about 10% in 2023 from what they would have been under existing regulations, then by about 5% a year over the next 3 years, through 2026.

The agency said it is preparing a proposed rule to update heavy-duty vehicle emissions. And it will at some point write emission standards for passenger cars and light trucks beyond 2026.

EPA sets air emission standards while the National Highway Transportation Safety Administration (NHTSA) sets corporate average fuel efficiency (CAFE) standards. For the proposed rule, EPA coordinated with NHTSA.

NHTSA issued an announcement Aug. 5 of tougher CAFE standards to come soon.

“The new standards would increase fuel efficiency 8% annually for model years 2024-2026 and increase the estimated fleetwide average by 12 miles per gallon for model year 2026, relative to model year 2021,” NHTSA said.

Biden executive order

Also Aug. 5, President Biden issued an executive order setting as a goal that 50% of all new passenger cars and light trucks sold in 2030 be zero-emission vehicles, including battery electric, plug-in hybrid electric, or fuel cell electric vehicles.

A statement issued jointly by Ford Motor Co., General Motors Corp., and Stellantis N.V. (the merged Fiat Chrysler and Peugeot maker) saying much the same thing, referring to “their shared aspiration to achieve sales of 40-50% of annual US volumes of electric vehicles ... by 2030.”

The American Fuel & Petrochemical Manufacturers, a group that includes most US refiners, was cautiously supportive. Chet Thompson, president of the group, said the Biden administration needs to take a collaborative approach on CAFE rules and transportation policies to protect consumers.

“Vehicle standards must be achievable, affordable for drivers, reflective of consumer preferences, and consistent across the United States,” Thompson said, adding that regulations “shouldn’t function as a regulatory backdoor to force vehicle electrification, which is one of the most expensive ways to reduce emissions.”