World Energy Outlook 2006

Box 7.1: New Vehicle Fuel Economy in the United States
The fuel economy of new cars and light trucks in the United States is
regulated by Corporate Average Fuel Economy (CAFE) standards. These
were first enacted by Congress in 1975, with the purpose of reducing energy
consumption. CAFE standards are the responsibility of the Department of
Transport (DOT) and the Environmental Protection Agency (EPA). DOT
sets standards for the cars and light trucks sold in the United States, while
EPA calculates the actual average fuel economy for each manufacturer. 7 The
standards for passenger cars have remained practically unchanged since
1985 at 27.5 miles per gallon (mpg). Light truck standards have been
increased by about 1 mpg since 1985. However, the fuel economy of the
light-duty vehicle fleet as a whole has now dropped to 21 mpg from its
1987-1988 high of 22.1 mpg (EPA, 2006). This is due to the growing share
of less-efficient but popular sports utility vehicles, which are classified as
light trucks, but are increasingly used as passenger vehicles (ACEEE, 2006).
In the Reference Scenario, no change in CAFE standards is assumed
during the projection period. Average fuel economy is nonetheless
assumed to improve very slightly, by 2.5% between now and 2030 in
that scenario. The Alternative Policy Scenario assumes the
implementation of the reform of CAFE standards proposed by the
National Highway Traffic Safety Administration (NHTSA), and the
introduction in California of the California Air Resources Board
(CARB) emission standards for light-duty vehicles. The NHTSA
proposal, made in August 2005, would restructure CAFE standards for
light trucks, resulting in significantly tighter standards overall, which
would be fully operational for model years from 2011. On the strength
of this reform, the average light truck fleet would be 14% more efficient
than today even in 2010. CARB standards set CO 2 emissions targets for
all vehicles sold in California: models sold in 2016 are expected to emit
30% less CO 2 than today. 8 Both CAFE and CARB standards are
assumed to be met and prolonged in the Alternative Policy Scenario. As
a result, new vehicle average fuel economy in 2030 is 31% higher than
in the Reference Scenario (see Chapter 9).
7. Details on fuel economy regulations can be found at: http://www.nhtsa.dot.gov/
8. The automotive industry has filed a suit against CARB, arguing that California’s greenhouse-gas
emission standards are effectively fuel economy standards and that they are, therefore, pre-empted by
a federal statute that gives the DOT exclusive authority to regulate fuel economy. (Energy
Information Administration, 2006).
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© OECD/IEA, 2007