The Environmental Protection Agency will be issuing revised fuel economy standards by the end of July, said new EPA Administrator Michael Regan, rewriting Trump-era limits that dictate emissions limits for cars and light trucks through the 2026 model year. The goal with the revised standards, he added, will be to mitigate certain climate impacts.
The new fuel efficiency standards will have to be significantly more stringent than those issued by the Trump-era EPA, which only finalized its rules in March 2020 after a 1.5-year-long process. Those limits call for 1.5 percent annual increases in efficiency through 2026 rather than the 5 percent target under Obama-era rules. Fuel efficiency standards in the US are overseen by both the EPA and the National Highway Traffic Safety Administration, an agency of the Department of Transportation.
“We’re taking a strong look at what the science is urging us to do. We’re looking at where technologies are,” Regan said in an interview with Bloomberg News. “We’re marrying our regulatory policy and what we have the statutory authority to do with where the science directs us and where the markets and technology are.”
While Regan did not mention any specific numbers, he did not rule out emissions limits that would force the phasing out of fossil-fuel vehicles. To achieve that, the number would probably be in the range of 60-70 miles per gallon combined, according to EPA methodology, which is what appears on new cars’ Monroney stickers. Today’s gas-powered cars struggle to crack 40 mpg combined, and hybrids have trouble getting more than 60 mpg combined. The least-efficient electric vehicle, on the other hand, the Porsche Taycan, gets the equivalent of 69 mpg.
Sell some credits
Current limits require the nation’s fleetwide average to be 40.4 mpg by 2026, much less than the Obama-era target of 54.5 mpg. These numbers are regulatory in nature—they don’t reflect what consumers see in real-world driving or what appears on the window sticker. To hit their marks, automakers can sell cars and trucks that pollute significantly more or less than the average. Companies that are underperforming the average can buy credits from companies with an excess. Tesla, for example, has sold credits to then-Fiat Chrysler and GM. (Certain vehicles, including many heavy-duty trucks like the Ford F-250, are exempt from fuel economy standards).
The weakening of standards under Trump was partially the result of lobbying by automakers, who wrote a letter to Trump’s transition team just days after the election calling on the EPA and NHTSA to coordinate emissions limits. The companies claimed that low gas prices and weak demand for electric vehicles made it all but impossible to reach the Obama targets. The Trump administration obliged, reviewing the regulations and producing a tortuous argument in favor of weakening emissions limits. The lower standards, the administration said, would ultimately save lives by letting automakers build cheaper vehicles that would allow consumers to buy new models sooner, which presumably would protect them better in a crash.
Today, though, the picture has changed significantly. Some countries and US states have announced the phase-out of fossil fuel vehicles in 2035 or 2040, depending on the jurisdiction. Automakers are announcing or have introduced dozens of new electric models, and EV sales are growing faster than the overall market.
Regan seems to be leaning heavily into the idea that EVs will give the US a path out of its carbon-intensive transportation sector. “It’s a false option to choose between economic development and prosperity and environmental protection,” he said.