Conservation, Efficiency and
Environmental Protection

Vehicle Fuel Economy

Economy standards for passenger vehicles were first enacted in 1975 in response to reduced oil supplies. A 2002 report by the National Academy estimated that vehicle fuel economy standards saved the nation 2.8 million barrels of oil per day in 2000, or 15% of the year's oil consumption.

• CAFE Standards:  The Corporate Average Fuel Economy (CAFE) is the sales weighted average fuel economy of a manufacturer's fleet of passenger cars or light trucks with a gross vehicle weight rating of 8,500 lbs. or less, manufactured for sale in the United States, for any given model year (MY). The standard progressively increased from 1975 to 1996, when Congress froze the requirement at 20.7 mpg. The freeze was lifted by Congress on December 18, 2001. On March 31, 2003, the National Highway Transportation Safety Administration issued new light truck standards, setting a standard of 21.0 mpg for MY 2005, 21.6 mpg for MY 2006, and 22.2 mpg for MY 2007.

• Increased Vehicle Fuel Economy:  In 2004, two automotive engineering firms studied the potential vehicle greenhouse gas reductions through fuel economy in relation to the cost of producing more fuel efficient vehicles. It found that average vehicle fuel economy could be cost-effectively increased to between 32 and 44 mpg by 2016, or a roughly 35 to 80 % increase over current levels of fuel economy, depending on gasoline prices. The Energy Information Association's National Energy Modeling System estimated the impact of higher fuel economy levels on retail vehicle prices. It estimated that an increase of 10 mpg in CAFE would cost consumers about $900 for a $28,000 vehicle, about a 3% increase in consumer price.