The Biden administration increased fuel-efficiency standards for passenger cars and light-duty trucks in an effort to combat climate change and push the auto industry toward electric vehicles.
The US Environmental Protection Agency (EPA) announced on Monday that it would require automakers to achieve a fleetwide average of 55 miles per gallon by model year 2026, up from the current standard of 43 mpg. The new standards go into effect in model year 2023 and increase annually. According to EPA estimates, they would reduce nationwide emissions by nearly 2%.
The regulations are the primary means by which the federal government addresses climate change through the transportation sector, which is the country’s largest source of greenhouse gas emissions. Since his campaign, President Biden has promised to raise standards for cars and trucks, as well as similar proposals aimed at power plants and oil and gas companies.
“We are establishing robust and rigorous standards that will aggressively reduce pollution that harms people and our planet—while also saving families money,” EPA Administrator Michael Regan said in a statement.
The move, which is central to Mr. Biden’s environmental agenda, is likely to be overshadowed by new congressional roadblocks to climate proposals. Sen. Joe Manchin (D., W.Va.), a swing vote, said on Sunday that he would oppose the Build Back Better legislative package, which included more than a half-trillion dollars in climate-related spending and would have done more to reduce global warming emissions than regulations alone.
The Alliance for Automotive Innovation, a lobbying group for automakers and suppliers, stated that meeting the higher fuel standards would be difficult without the types of measures included in Build Back Better.
“The EPA’s final rule for greenhouse-gas emissions is even more aggressive than originally proposed, requiring a significant increase in electric-vehicle sales, well above the current 4 percent of all light-duty sales,” said the group’s president, John Bozzella, in a statement. “Achieving the goals of this final rule will undoubtedly necessitate the implementation of supportive governmental policies, such as consumer incentives, significant infrastructure growth, fleet requirements, and support for U.S. manufacturing and supply-chain development,” he said.
Under pressure from environmentalists, consumer advocates, and their White House allies, the EPA became more aggressive in the final rule than it had been in an earlier proposal announced formally in August. Mr. Regan’s package, which he signed on Monday, limits automakers’ flexibility in accounting for emissions from their fleets. In theory, this reduces pollution faster. It also makes it more difficult for businesses to comply.
Automakers, who had applauded the August proposal, have said the changes could jeopardize the program. More stringent rules are likely to raise upfront costs, discouraging consumer adoption of zero-emissions cars and trucks, a problem that could worsen if Congress fails to approve other subsidies, according to lobbyists.
According to the EPA, the new rules will save drivers in the United States between $210 billion and $420 billion in fuel costs by 2050. Even after accounting for higher purchase prices, the EPA estimates that each buyer will save about $1,000 over the life of the vehicle beginning with model year 2026.
The announcement on Monday is the latest in a series of changes to fuel-efficiency standards in the United States.
Mr. Biden’s new package effectively reinstates Obama-era rules that had been relaxed under former President Donald Trump. The Trump-era regulations will remain in effect until model year 2022, but auto fleets will be required to increase efficiency by 9.8 percent the following year. Following that, the standards will rise by 5% to 10% per year until they reach 55 miles per gallon in 2026.
According to the EPA, the 55 mpg requirement equates to an estimated 40 mpg in real-world stop-and-go driving.