EPA and NHTSA Set Standards to
Reduce Greenhouse Gases and
Improve Fuel Economy for Model
Years 2017-2025 Cars and Light Trucks
The U.S. Environmental Protection Agency (EPA) and the
Department of Transportation's National Highway Traffic Safety
Administration (NHTSA) are issuing final rules extending the National
Program to further reduce greenhouse gas (GHG) emissions and improve
fuel economy for model years (MYs) 2017 through 2025 light-duty
vehicles. EPA is establishing national GHG emissions standards
under the Clean Air Act, and NHTSA is establishing Corporate
Average Fuel Economy (CAFE) standards under the Energy Policy
and Conservation Act, as amended by the Energy Independence and
Security Act (EISA).
EPA's standards apply to passenger cars, light-duty trucks, and
medium-duty passenger vehicles, in MYs 2017 through 2025. The
final standards are projected to result in an average industry fleetwide
level of 163 grams/mile of carbon dioxide (CO2) in model year 2025,
which is equivalent to 54.5 miles per gallon (mpg) if achieved exclusively
through fuel economy improvements. Light-duty vehicles are currently
responsible for nearly 60 percent of U.S. transportation-related petroleum
use and GHG emissions.
This new phase in this broadly supported national program conserves
billions of barrels of oil, cuts carbon pollution, protects consumer choice,
and enables long-term planning for automakers.
SEPA
United States
Environmental Protection
Agency
Office of Transportation and Air Quality
EPA-420-F-12-051
August 2012
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Building on Success
This MYs 2017-2025 program builds on the success of the first phase of the National Program
for MYs 2012-2016 vehicles, which is projected to result in an average light-duty vehicle tailpipe
CO2 level of 250 grams per mile by MY 2016, equivalent to 35.5 mpg (if achieved exclusively
through fuel economy). Vehicles meeting the MYs 2012 and 2013 standards are on the road
today, already saving consumers money at the pump.
Combined with the MYs 2012-2016 standards, today's final program will result in MY 2025
vehicles emitting one-half of the GHG emissions of a MY 2010 vehicle, representing the most
significant federal action ever taken to reduce GHG emissions and improve fuel economy,
As with the first phase of the National Program, this second phase of the program was built on
strong support from a wide range of stakeholders, including the automobile manufacturers. After
President Obama announced plans for the second phase National Program on July 29, 2011,
thirteen auto manufacturers representing over 90 percent of U.S. vehicle sales announced support
for the program, as well as the State of California. The United Auto Workers, consumer
organizations, environmental organizations, veterans groups, state/local governments, and
nearly 300,000 individuals have also expressed strong support for the program.
Continuing the National Program ensures that auto manufacturers can build a single fleet of
U.S. vehicles that satisfy requirements of both federal programs as well as California's program,
thus helping to reduce costs and regulatory complexity while providing significant energy security
and environmental benefits to the nation as a whole.
Benefits to Consumers
These standards will provide significant savings for consumers at the pump. Higher costs for new
vehicle technology are projected to add, on average, about $1,800 for consumers who buy a new
vehicle in MY 2025. Those consumers who drive their MY 2025 vehicle for its entire lifetime
will save, on average, $5,700 to $7,400 (7 and 3 percent discount rates, respectively) in fuel sav-
ings, for a net lifetime savings of $3,400 to $5,000 (when compard to a vehicle meeting the MY
2016 standards). For those consumers who purchase their new MY 2025 vehicle outright, the
discounted fuel savings will offset the higher vehicle cost in less than 3.5 years, and fuel savings
will continue for as long as the consumer owns the vehicle.
Those consumers who purchase a new MY 2025 vehicle with a standard 5-year loan will
immediately benefit as the monthly fuel savings offset the higher monthly payment by about
$12 or about $140 per year. These savings assume a gasoline price of $3.87 in 2025 with small
future increases throughout the vehicle's lifetime; if gas prices soar consumers would save even
more money as a result of these more fuel-efficient vehicles.
The final standards preserve consumer choice - that is, the standards should not affect consumers'
opportunity to purchase the size of vehicle with the performance, utility and safety features that
meet their needs. The standards have been designed in a way that does not create incentives to
manufacture vehicles of any particular size (for example, there is no incentive to downsize.
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Benefits from Greenhouse Gas Reductions and Less Oil Dependency
Over the lifetimes of the vehicles sold in MYs 2017-2025 standards, this program is projected to
save approximately 4 billion barrels of oil and reduce GHG emissions by 2 billion metric tons,
with net benefits to society in the range of $326 billion to $451 billion (7 and 3 percent discount
rates, respectively). These savings come on top of savings that would already be achieved through
the continuation of the MY 2016 standards.
The combined National Program for MYs 2012-2016 and MYs 2017-2025 is projected to save
families more than $1.7 trillion in fuel costs and reduce America's dependence on oil by more
than 2 million barrels per day in 2025, which is equivalent to one-half of the oil that we cur-
rently import from OPEC countries each day. In addition, the combined program will cut 6
billion metric tons of greenhouse gases over the lifetimes of the vehicles sold in MYs 2012-2025
- more than the total amount of carbon dioxide emitted by the United States in 2010,
Consumers who purchase a new MY 2025 vehicle will save more than $8,000 in fuel costs
over that vehicle's lifetime (when compared to a vehicle meeting the MY 2011 CAFE
standards).
EPA's Greenhouse Gas Standards
EPA is finalizing a set of fleet-wide average carbon dioxide (CO2) emission standards for cars
and light trucks. These standards are based on CO2 emissions-footprint curves, where each
vehicle has a different CO2 emissions compliance target depending on its footprint value
(related to the size of the vehicle). Generally, the larger the vehicle footprint, the higher the
corresponding vehicle CO2 emissions target. As a result, the burden of compliance is distributed
across all vehicles and all manufacturers. Manufacturers are not compelled to build vehicles of
any particular size or type (nor does the rule create an incentive to do so), and no single vehicle
is required to meet its individual target. Each manufacturer will have its own fleet-wide standard
that reflects the vehicles it chooses to produce, and the GHG program provides a wide range of
credit programs and flexibilities for manufacturers to meet the standards.
Table 1 shows the projected fleet-wide CO2 emission targets under this footprint-based ap-
proach. The car CO2 emission levels are projected to increase in stringency from 212 to 143
grams per mile (g/mi) between MY s 2017 and 2025. Similarly, fleet-wide CO2 emission levels
for trucks are projected to increase in stringency from 295 in MY 2017 to 203 g/mi in MY 2025,
EPA projects that the average light vehicle (combined car and truck) tailpipe CO2 compliance
level in MY 2017 will be 243 g/mi, phasing down by MY 2025 to 163 g/mi, corresponding to
54.5 mpg in MY 2025 if all reductions were made through fuel economy improvements.
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Table 1 - Projected Fleet-Wide Emissions Compliance Targets under the Footprint-Based
CO2 Standards (g/mi) and Corresponding Fuel Economy (mpg)
Passenger Cars (g/mi)
Light Trucks (g/mi)
Combined Cars&
Trucks (g/mi)
Combined Cars&
Trucks (mpg)
2016
base
225
298
250
35.5
2017
212
295
243
36.6
2018
202
285
232
38.3
2019
191
277
222
40.0
2020
182
269
213
41.7
2021
172
249
199
44.7
2022
164
237
190
46.8
2023
157
225
180
49.4
2024
150
214
171
52.0
2025
143
203
163
54.5
Figures 1 and 2 show the actual footprint curves for cars and trucks, respectively. For passenger
cars, the CO2 compliance values associated with the footprint curves would be reduced on average
by 5 percent per year from the MY 2016 projected passenger car industry-wide compliance level
through MY 2025. To address the challenges facing light'duty trucks, as we transition from the
MY 2016 standards to MY 2017 and later, while preserving the utility (e.g., towing and payload
capabilities) of those vehicles, EPA's standards provide a lower annual rate of improvement for
light'duty trucks in the early years of the program. The average annual rate of CO2 emissions
reduction in MYs 2017 through 2021 is 3.5 percent per year and 5 percent per year for MYs
2022 through 2025.
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Figure 1 CO2 (g/mile) Car Standards Curves
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Figure 2 CO2 (g/mile) Truck Standard Curves
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Example footprint targets for popular vehicle models are shown in Table 2, illustrating the fact
that different vehicle sizes will have varying CO2 emissions and fuel economy targets under
the footprint-based standards. Vehicle CO2 emissions will be measured over the EPA city and
highway tests,
Table 2 Model Year 2025 CO2 and Fuel Economy Targets for Representative MY 2012 Vehicles
Vehicle Type
Example
Models
Example Model
Footprint (sq. ft.)
EPA CO2
Emissions Target
(g/mi)*
NHTSA Fuel
Economy
Target (mpg)
* / **
Example Passenger Cars
Compact car
Mid-size car
Full-size car
Honda Fit
Ford Fusion
Chrysler 300
40
46
53
131
147
170
61.1
54.9
48.0
Example Light-duty Trucks
Small SUV
Midsize crossover
Minivan
Large pickup truck
4WD Ford
Escape
Nissan Murano
Toyota Sienna
Chevy Silverado
(extended
cab,6.5 foot
base)
43
49
56
67
170
188
209
252
47.5
43.4
39.2
33.0
* Real-world CO2 is typically 25 percent higher and real-world fuel economy is typically 20 percent lower than the
CO2 and CAFE values discussed here.
** The fuel economy mpg targets shown in the last column would be higher if using the MPG-equivalent values
corresponding to the CO2 emissions targets, i.e., if all CO2 reductions were achieved exclusively with higher fuel
economy technologies.
VehicleTechnologies to Reduce GHGs and Improve Fuel Economy
EPA projects that manufacturers will comply with the MYs 2017-2025 standards by using a wide
range of technologies, including continual advances in gasoline engines and transmissions, vehicle
weight reduction, lower tire rolling resistance, vehicle aerodynamics, diesel engines, and more
efficient vehicle accessories. EPA expects that the majority of improvements will come from
advancements in internal combustion engines, although we also expect to see some increased
electrification of the fleet through the expanded production of stop/start, hybrid vehicles, plug-
in hybrid electric vehicles, and electric vehicles. EPA also expects that vehicle air conditioning
systems will continue to become more efficient, reduce leakage, and use alternative refrigerants
with lower hydrofluorocarbon emissions.
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Mid-Term Evaluation
Given the long time frame at issue in setting standards for MYs 2022-2025, and given NHTSA's
obligation to conduct a separate rulemaking in order to establish final standards for vehicles for
those model years, EPA and NHTSA will conduct a comprehensive mid'term evaluation and
agency decision-making process. As part of this undertaking, EPA and NHTSA will develop and
compile up-to-date information for the evaluation, through a collaborative, robust and transparent
process, including public notice and comment. EPA and NHTSA fully expect to conduct this
mid-term evaluation in coordination with the California Air Resources Board (GARB), given
our interest in maintaining a National Program to address GHG emissions and fuel economy.
The comprehensive evaluation process will lead to final agency action by both agencies.
EPA's Program Flexibilities
EPA's final program includes provisions that offer compliance flexibility to auto manufactur-
ers. Together these flexibilities are expected to provide sufficient lead time for manufacturers
to make necessary technological improvements and to reduce the overall cost of the program,
without compromising overall environmental objectives. The flexibilities also provide incentives
to facilitate market penetration of the most advanced vehicle technologies,
Credit Banking and Trading * EPA will continue the same comprehensive program for averag-
ing, banking, and trading of credits established in the MYs 2012-2016 program. Together, these
provisions help manufacturers in planning and implementing the orderly phase-in of GHG-
reducing technology in their production, consistent with typical redesign schedules. Credits may
be carried forward, or banked, for five years, or carried back three years to cover a deficit in a
previous year. A manufacturer may transfer credits across all vehicles it produces, both cars and
light trucks. Trading of credits between companies is also permitted. To facilitate the transition
to the increasingly more stringent MYs 2017-2025 standards, EPA is finalizing under its Clean
Air Act authority a one-time CO2 credit carry-forward provision beyond 5 years, allowing credits
generated from MYs 2010 through 2016 to be used through MY 2021.
Air Conditioning Improvement Credits * As with the MYs 2012-2016 program, manufacturers
will be able to generate CO2-equivalent credits to use in complying with the CO2 standards for
(1) improvements in air conditioning (A/C) systems that reduce tailpipe CO2 through efficiency
improvements, and (2) for reduced refrigerant leakage—through better components and/or use of
alternative refrigerants with lower global warming potential. Currently A/C systems use
refrigerants containing hydrofluorocarbons (HFC) which are highly potent greenhouse gases,
and EPA's A/C credits will give manufacturers an incentive to accelerate the use of refrigerants
with much lower HFC emissions,
Off'Cycle Credits * Off-cycle technologies achieve CO2 reductions that are not reflected in current
test procedures. Such off-cycle technologies might include solar panels on hybrids, engine start-
stop or active aerodynamics. EPA is expanding and streamlining the MYs 2012-2016 off-cycle
credit provisions for demonstrating and obtaining these credits. For MYs 2014 and later, EPA
is finalizing a pre-approved list of technologies and credit values. Further, manufacturers will be
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able to apply for off-cycle technology credits beyond those listed (or for different credit values
for the listed technologies) if they present sufficient data to EPA,
Incentives for Electric Vehicles, Plug-in Hybrid Electric Vehicles, Fuel Cell Vehicles, and
Compressed Natural Gas Vehicles * To facilitate market penetration of the most advanced vehicle
technologies as rapidly as possible, EPA is finalizing an incentive multiplier for compliance
purposes for all electric vehicles (EVs), plug'in hybrid electric vehicles (PHEVs), fuel cell vehicles
(FCV) and compressed natural gas (CNG) vehicles sold in MYs 2017 through 2021. This
multiplier approach means that each EV/PHEV/FCV/CNGV would count as more than one
vehicle in the manufacturer's compliance calculation. EVs and FCVs will start with a multiplier
value of 2.0 in MY 2017, phasing down to a value of 1.5 in MY 2021. PHEVs and CNG vehicles
will start at a multiplier value of 1.6 in MY 2017 and phase down to a value of 1.3 in MY 2021,
There are no multipliers for MYs 2022-2025,
For EVs, PHEVs and FCVs, EPA is setting 0 g/mi as the tailpipe compliance value for EVs,
PHEVs (electricity usage) and FCVs for MYs 2017-2021, with no limit on the quantity of vehicles
eligible for 0 g/mi tailpipe emissions accounting. For MYs 2022-2025, 0 g/mi will only be allowed
up to a per-company cumulative sales cap:
1) 600,000 vehicles for companies that sell 300,000 EV/PHEV/FCVs in MYs 2019-2021;
2) 200,000 vehicles for all other manufacturers.
For sales above these thresholds, manufacturers will be required to account for the net upstream
GHG emissions for the electric portion of operation, using accounting methodologies set out in
the rule,
Incentives for Advanced Technologies Including Hybridization for Full-Size Pickup
Trucks - EPA is finalizing an additional CO2 per vehicle credit, for mild and strong hybrid
electric (HEV) full-size pickup trucks, if this advanced technology is utilized across a designated
percentage of a manufacturers' full-size pickup trucks. This incentive further encourages
manufacturers to begin to transform the most challenged category of vehicles in terms of the
penetration of advanced technologies.
Eligibility for this credit is conditioned on a minimum penetration of the technology in a manu-
facturer's full size pickup truck fleet. Mild HEVs pickup trucks will be eligible for a per vehicle
credit of 10 g/mi during MYs 2017-2015 if the technology is used with at least 20% of a company's
MY 2017 full-size pickup production and ramping up to at least 80% in MY 2021. Strong HEV
pickup trucks will be eligible for 20 g/mi per vehicle credit during MYs 2017-2025 if the
technology is used on at least 10% of the company's full size pickups.
In addition to the specific hybridization credits, because there are other technologies besides
mild and strong hybrids which can significantly reduce GHG emissions and fuel consumption
in pickup trucks, EPA is also finalizing a performance-based incentive CO2 emissions credit
for full-size pickup trucks that achieve a significant CO2 reduction below the applicable target.
To avoid double-counting, the same vehicle will not receive credit under both the HEV and
performance based approaches.
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Treatment of Compressed Natural Gas (CNG), Plug-in Hybrid Electric Vehicles (PHEVs),
and Flexible Fuel Vehicles (FFVs) * EPA is finalizing a methodology for determining CO2
levels for plug-in hybrid electric vehicles (PHEVs) and dual fuel compressed natural gas (CNG)
vehicles. This methodology assumes how much of the time these vehicles will operate using the
alternative fuel, and how much on gasoline. This methodology (called a "utility factor") assumes
that owners of these vehicles will use the cheaper non-gasoline fuel most of the time, since that
was a main reason for purchasing the vehicle,
As proposed, EPA is not establishing a utility factor for flexible fueled vehicles (FFVs) using
E-85 and gasoline, since there is not a significant cost differential between an FFV and a
conventional gasoline vehicle and historically consumers have only fueled these vehicles with
E85 a very small percentage of the time. FFVs continue to be treated as they are treated in MY
2016 where emissions are weighted based on actual alternative fuel usage,
Provisions for Intermediate and Small Volume Manufacturers * In the MYs 2012-2016 rule,
EPA provided less stringent CO2 standards through MY 2016 to manufacturers with U.S. sales
of less than 50,000 vehicles under the Temporary Lead time Allowance Alternative Standards
(TLAAS) program. For MYs 2017-2025 standards, EPA is providing additional lead time flexibility
to these intermediate volume manufacturers to help ease their transition to the primary program
standards. The lead time flexibility is available through MY 2020 and intermediate volume
manufacturers are required to meet the primary standards starting in MY 2021,
EPA is allowing small volume manufacturers (SVMs) with U.S. sales of less than 5,000 vehicles
to petition EPA for alternative CO2 standards, which will be established for eligible SVMs on
a case-by-case basis. These SVMs are exempt under the MYs 2012-2016 CO2 standards. EPA
is also allowing manufacturers that are able to demonstrate that they are operationally independent
from their parent company and have U.S. sales of less than 5,000 vehicles to be eligible for
SVM GHG provisions.
In addition, EPA is continuing to exempt small businesses (companies with less than 1,000
employees, as defined by the Small Business Administration) from all GHG standards and
program requirements.
Public Participation
EPA developed this final rule after consideration of extensive public input. EPA and NHTSA
heard from nearly 400 testifiers at three public hearings held in Detroit, Philadelphia and San
Francisco during January 2012. The agencies received written comments from nearly 300,000
individuals and more than 140 organizations, including auto manufacturers and suppliers, state
and local governments and their associations, consumer groups, labor unions, fuels and energy
providers, auto dealers, academics, national security experts and veterans, environmental and
other non-governmental organizations.
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Background on the MYs 2017-2025 National Program
Following the successful adoption of a National Program for GHG and fuel economy standards
for MYs 2012-2016 vehicles, President Obama requested the agencies to continue their efforts
to develop a second phase of the National Program, with standards for MYs 2017-2025 light-
duty vehicles. In a May 21, 2010, Presidential Memorandum, the President requested that EPA
and NHTSA work together to develop a national program that would ".. .produce a new genera-
tion of clean vehicles." The President specifically requested that the agencies develop "...a coor-
dinated national program under the CAA [Clean Air Act] and the EISA [Energy Independence
and Security Act of 2007] to improve fuel efficiency and to reduce greenhouse gas emissions of
passenger cars and light-duty trucks of model years 2017-2025." The President recognized our
country could take a leadership role in addressing the global challenges of improving energy security
and reducing greenhouse gas pollution, stating that "America has the opportunity to lead the
world in the development of a new generation of clean cars and trucks through innovative technologies
and manufacturing that will spur economic growth and create high-quality domestic jobs, en-
hance our energy security, and improve our environment."
The agencies worked with the State of California to address all elements requested in the May
21, 2010 Presidential Memorandum and completed an initial assessment of the technologies,
strategies and underlying analyses that would be considered in setting standards for MYs 2017-
2025, in consultation with a wide range of stakeholders. EPA and NHTSA issued an Interim
Joint Technical Assessment Report (TAR) and a Notice of Intent (NOI) to conduct a joint
rulemaking on September 30, 2010.1 Following an opportunity for public comment, the agen-
cies published a Supplemental NOI (SNOI)2 in December 2010 highlighting many of the key
comments received in response to the September NOI and the TAR and outlining plans for key
technical analyses that would be undertaken in developing the proposed rulemaking.
On July 29, 2011, President Obama announced plans for the MYs 2017-2025 national program
and EPA and NHTSA issued another SNOI3, outlining plans for the MYs 2017-2025 proposed
program. The State of California and thirteen auto manufacturers representing over 90 percent
of U.S. vehicle sales provided letters of support for the program concurrent with the SNOI,
The joint proposal to extend the National Program to MYs 2017-2025 light-duty vehicles was
issued on November 16, 2011 and published in the Federal Register on December 1, 2011.4
For More Information
You can access the final rule, regulations and related documents on EPA's Office of Transporta-
tion and Air Quality (OTAQ) Web site at:
www.epa.gov/otaq/climate/regulations.htm
For more information on this rule, please contact the U.S. Environmental Protection Agency,
Office of Transportation and Air Quality at:
E-mail: OTAQPUBLICWEB@epa.gov
1 75 FR 62739, October 13, 2010.
2 75 FR 76337, Decembers, 2010.
3 76 FR 48758, August 9, 2011
4 76 FR 74854, December 1, 2011.
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