The Biden administration will unveil updated, tougher fuel economy standards for passenger vehicles this week. The move will reverse Trump administration rollbacks and will be implemented alongside tougher penalties for automakers that fail to achieve fuel economy standards.
The National Highway Traffic Safety Administration and Transportation Secretary Pete Buttigieg will make a “major announcement” on the topic of fuel economy standards on Friday the Transportation Department said, per Reuters.
No further details were offered about the announcement but last August NHTSA argued that Corporate Average Fuel Economy (CAFE) standards should increase eight percent annually for the 2024 to 2026 model years. It said that the changes would save consumers $140 billion in fuel costs for new vehicles by 2030. The move would also raise estimated fleetwide fuel consumption by 12 miles per gallon in 2026, relative to 2021.
On Monday, the Biden administration asked Congress for $27.5 million to support the next phase of NHTSA’s fuel economy regulations, which “represents meaningful progress toward achieving the administration’s climate agenda.”
The move would reverse decisions made under the Trump administration in March 2020 to roll back fuel economy standards set under the Obama administration. Under the latter’s administration, fuel economy standards were supposed to rise by five percent every year through 2026. The Trump administration, though, reduced that to only require a 1.5 percent increase.
Stricter CAFE standards will present a twofold challenge for automakers who will be subject to larger penalties for failing to meet fuel economy targets. That’s thanks to another decision taken by the current administration to increase penalties that were paused by the last Republican administration.