adminending months of negotiations on this pivotal mandate for the motor industry.
Vehicle makers’ fleets will now have to average 54,5 miles per gallon by 2025, according to people familiar with the plan. US president Barack Obama will officially announce new guidelines today, the White House said.
The compromise is slightly less than the administration’s original proposal for corporate average fuel economy, or CAFE, standards. But it is a major step up from current standards that require automakers to achieve 35,5 mpg by 2016.
Earlier, the administration had proposed increasing the CAFE target to 56,2 mpg between 2017 and 2025, but that plan ran into opposition from the industry and some lawmakers. The push to boost fuel efficiency has forced carmakers to redesign vehicles and use lighter but more expensive materials. These efforts are likely to raise the cost of vehicles and may pinch carmakers’ margins. That has caused resistance from lawmakers in states with a heavy auto manufacturing presence, as well as the United Auto Workers union, which is concerned about jobs.
The new proposal includes average increases in fuel economy of 5 percent for cars and 3,5 percent for light trucks through 2021, with a 5 percent increase for all vehicles after that. One person said there would be a midterm review that may allow trucks to stay below the 5 percent target after 2021. Ford Motor Co spokeswoman Meghan Keck said there are still some issues that need to be worked out regarding the new standards.
“We continue to believe that the talks are productive, that there are a couple of details that we’re still ironing out and that we hope to be able to say more soon,” Keck said.
While declining to discuss the 54,5 mpg figure, Toyota Motor Corp spokeswoman Martha Voss said discussions on the new rules have been “positive”. Environmental groups and Democratic leaders have pushed for strong fuel economy standards to lower carbon dioxide emissions and decrease US oil use.
“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 Representative Edward Markey in a statement. US passenger vehicles emit about 20 percent of the nation’s carbon emissions and consume about 44 percent of its oil, figures show. – Reuters.
Peter Tanyanyiwa
Online Reporter