Corporate Average Fuel Economy (CAFE): A Comparison of Selected Legislation in the 110th Congress

Publication Date: May 2007

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Energy

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Abstract:

The rise in crude oil and gasoline prices since the winter of 2006 has renewed the focus on U.S. fuel consumption in the transportation sector. Wider concerns over greenhouse gas emissions and climate change have contributed to interest in reducing fossil fuel consumption and improving the efficiency of the U.S. transportation sector. Possible changes to the federal Corporate Average Fuel Economy (CAFE) standards are one policy option to address the issue.

CAFE standards are fleetwide fuel economy averages that manufacturers must meet each model year. Currently, separate CAFE standards are established for passenger cars and light trucks, which include sport utility vehicles (SUVs), vans, and pickup trucks. Several bills have been introduced in the 110th Congress to modify the CAFE program. Provisions vary from bill to bill but include increasing the CAFE standards for all vehicles; changing fuel economy testing procedures to make them more accurate, and probably more conservative, measurements of consumer-experienced on-road fuel economy; and granting the National Highway Traffic Safety Administration (NHTSA) broader authority to implement the CAFE program.

This report provides a side-by-side comparison of several bills in the 110th Congress addressing passenger vehicle fuel economy in general and the CAFE program specifically. The report covers CAFE-related Senate and House bills. The bills are compared on various policy options including, but not limited to, the types of provisions identified above. The report also compares provisions in bills that would establish greenhouse gas emissions standards for passenger cars outside of the CAFE structure. Such emissions standards would likely also have the effect of increasing fuel economy.

One issue in the CAFE debate over the years has been whether Congress should set CAFE standards or delegate that authority exclusively to NHTSA. For passenger cars, the original EPCA legislation established specific targets for model year (MY) 1978 and MY1985, and required that the Secretary of Transportation set standards for the interim years. Some of the current proposals would also set specific targets in the future; others would require annual improvements in CAFE by some specified percentage. In some instances, both approaches are used. Those proposals would establish a mandated CAFE by a certain date and require subsequent annual percentage increases. Some bills would also require NHTSA to set the maximum feasible interim standards.