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Office of Transportation EPA420-F-06-062 

and Air Quality October 2006 

Program

Overview

EPA's Fuel Economy Programs 

This fact sheet describes the U.S. Environmental Protection Agency’s 

(EPA) Fuel Economy Program. EPA is responsible for providing the fuel 

economy data that is used by the U.S. Department of Energy (DOE) 

to publish the annual Fuel Economy Guide, by the U.S. Department 

of Transportation (DOT) to administer the Corporate Average Fuel 

Economy (CAFE) program, and by the Internal Revenue Service (IRS) 

to collect Gas Guzzler taxes. 

Introduction 

Fuel economy, or gas mileage, continues to be a major area of public 

and policy interest for several reasons. Passenger vehicles account for 

approximately 40 percent of all U.S. oil consumption, so increasing 

energy efficiency helps reduce our dependence on imported oil and 

enhances the nation’s energy security. Likewise, it helps conserve our 

fossil resources for future generations. Passenger vehicles also contribute about 20 percent of all U.S. carbon dioxide emissions, so increasing 

fuel efficiency helps reduce greenhouse gas emissions. Finally, the more 

miles a car gets per gallon of gasoline, the more money the owner saves 

on fuel costs. Given the importance of fuel economy, the federal government administers three programs to provide information to consumers 

about fuel economy and to encourage the production of fuel efficient 

vehicles. 
Fuel Economy Labels and Fuel Economy Guide

Once a year, EPA and DOE publish the Fuel Economy Guide listing the 

fuel economy estimates (expressed in miles per gallon) of new passenger 

vehicles. The Fuel Economy Guide is published and distributed by DOE 

based on EPA’s data. The fuel economy estimates listed in the guide are 

based on laboratory testing performed by the auto manufacturers and 

EPA. 

What Vehicles Are Tested? 

Not every vehicle is tested for fuel economy. Instead, manufacturers are 

required to split each model into smaller groups, based upon the various 

options available that can impact fuel economy (such as vehicle weight, 

transmission type and engine size). A vehicle from each of these groups 

with the highest projected sales must be tested. Also, passenger cars and 

light trucks with a gross vehicle weight rating (GVWR) greater than 

8,500 pounds are exempt from fuel economy requirements, and are not 

tested for fuel economy (however, they are still subject to Federal emission requirements.) 

Manufacturers test all the vehicles at their laboratories. EPA confirms 

about 10-15 percent of the vehicles at its National Vehicles and Fuel 

Emission Laboratory in Ann Arbor, Michigan. 

How are Vehicles Tested? 

Vehicles are driven over identical driving patterns by professional drivers in controlled laboratory conditions on a dynamometer, which is like a 

treadmill for cars. The conditions that occur during driving, such as wind 

drag and inertia are accounted for on the dynamometer. There are two 

types of tests that are conducted: city and highway tests. 

The city test is approximately 11 miles long and simulates a stop and go 

trip with an average speed of about 20 miles per hour (mph). The trip 

lasts 31 minutes and has 23 stops. About 18 percent of the time is spent 

idling (as in waiting for traffic lights). A short freeway driving segment 

is included in the test. The engine is initially started after being parked 

overnight. 

The highway test simulates a 10 mile trip with an average speed of 48 

mph. The vehicle is started “hot” and there is very little idling and no 

stops. 

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How Are the Label Estimates Calculated? 

Fuel economy estimates are calculated from the emissions generated during the tests using a carbon balance equation. We know how much carbon 

is in the fuel, so by precisely measuring the carbon compounds expelled in 

the exhaust we can calculate the fuel economy.

After the vehicles have been tested, the results are adjusted downward to 

account for conditions that occur on the road that can affect fuel economy 

which don’t occur during laboratory testing, such as cold temperature, 

aggressive driving, excessive use of power-hungry accessories, among 

others. The city is adjusted downward by 10 percent, and the highway by 

22 percent.

The equation for calculating the city or highway average fuel economy, 

given in miles per gallon (mpg), is:

FEave = (total sales / [(sales1/FE1)+ (sales2/FE2) + ...+ (salesn/FEn)]

The calculation for combined fuel economy weights the city at 55 percent 

and the highway at 45 percent using the following equation:

FEcomb = 1 / (( .55 / city FE) + (.45 / hwy FE))

What Information Is In The Fuel Economy Guide and 

on The Fuel Economy Label?

The fuel economy city and highway estimates are printed in the Fuel 

Economy Guide and posted on the window sticker labels of all new cars 

and light trucks. Also included on the labels and in the Guide are the 

projected annual fuel costs as determined from the combined city and 

highway fuel economy, assuming 15,000 miles traveled per year and using 

estimated fuel costs (provided by the Department of Energy) from the following table (for 2007 model year vehicles): 

Regular Unleaded Gasoline $2.65 per gallon 

Premium Unleaded Gasoline $2.85 per gallon 

Diesel Fuel $2.65 per gallon 

CNG (Gasoline equivalent) $1.45 per gallon equivalent 

E85 Ethanol Fuel $2.20 per gallon 

LPG (Propane) $1.70 per gallon 

Hydrogen $5.85 per kilogram 

Electricity $0.10, 0.15 per kilowatt-hour 

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The fuel prices were determined in advance to allow time for printing 

labels and the Fuel Economy Guide. For more recent fuel cost estimates 

using current fuel prices, visit www.fueleconomy.gov.The Fuel Economy 

Guide is published and distributed to dealerships across the United 

States. New car dealers are required to have copies of the Guide available to consumers. The Guide is also available online at www.fueleconomy.gov. 

Corporate Average Fuel Economy (CAFE)

Corporate Average Fuel Economy (CAFE) is the required average fuel 

economy for a vehicle manufacturer’s entire fleet of passenger cars and 

light trucks manufactured for sale in the United States for each model 

year. There are separate average fuel economy standards for passenger 

cars and light trucks. Light trucks include those with a gross vehicle 

weight rating (GVWR) of 8,500 pounds or less. CAFE values are obtained using the same test data generated by the fuel economy tests used 

to determine the fuel economy estimates for the Guide and labels, but the 

test results are not adjusted to account for real-world conditions. Instead, 

the results from the city and highway tests are combined. EPA administers the testing program which generates the fuel economy data and 

determines the procedures for calculating the fuel economy values for 

CAFE. The National Highway Traffic and Safety Administration (NHTSA), which is part of DOT, is responsible for establishing and amending 

the CAFE standards for light trucks. Congress sets the CAFE standards 

for cars. EPA reports the CAFE results for each manufacturer to NHTSA 

annually, and NHTSA determines if the manufacturers comply with the 

CAFE standards and assesses penalties as required. More information 

about CAFE can be found on NHTSA’s web site at http://www.nhtsa.dot. 

gov/portal/site/nhtsa/menuitem.d0b5a45b55bfbe582f57529cdba046a0/. 

Green Vehicle Guide 

Every year since 2000, EPA publishes emissions information for the new 

model year cars and light trucks on its Green Vehicle Guide Web site at 

www.epa.gov/greenvehicles. This user-friendly site is designed to help 

consumers identify the cleanest, most efficient vehicle that meets their 

needs. It provides consumers with the opportunity to compare the relative emissions performance of vehicles by means of the 0-10 emissions 

rating assigned to each vehicle. Vehicles rated higher than others are 

designed to emit fewer pollutants such as carbon monoxide, nitrogen 

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oxides, hydrocarbons and particulate matter. Vehicles can be viewed individually or by class, such as SUVs, sedans, or pickups. 

The emissions ratings are based on the EPA emission standards the vehicle was certified to meet. Because manufacturers can choose from a complex set of emission standards, it is not always easy to understand them. 

The Green Vehicle Guide “demystifies” these standards, and allows consumers to see that they may have a choice to buy a cleaner, more efficient 

vehicle, regardless of the size, type or style they are interested in. 

The Green Vehicle Guide also identifies the cleanest, most fuel efficient 

vehicles with a “SmartWaysm” logo. More information about SmartWay 

vehicles is found at http://www.epa.gov/greenvehicles/about.htm. 

Gas Guzzler Tax 

The Gas Guzzler Tax is imposed on manufacturers of new model year 

cars (not minivans, sport utility vehicles or pick-up trucks) that fail to 

meet the minimum fuel economy level of 22.5 mpg. The tax is intended 

to discourage the production and purchase of fuel inefficient vehicles. 

The fuel economy figures used to determine the tax are based on combined city and highway fuel economy that is unadjusted for real-world 

conditions, and thus is different from the fuel economy estimates provided in the Fuel Economy Guide. The tax is collected by the Internal 

Revenue Service and normally paid by the manufacturer or importer after 

production has ended for the model year and is based on the total number of gas guzzler vehicles which were introduced into commerce in the 

United States. The amount of the tax paid is displayed on the vehicle’s 

fuel economy label (the window sticker on new cars). Information on 

Gas Guzzler Tax: www.epa.gov/otaq/cert/mpg/guzzler/index.htm.

For More Information 

You can access additional information about these programs at the following web sites: 

• Information on EPA’s Fuel Economy Program, including 

regulations, test data, and consumer tips: 

www.epa.gov/fueleconomy 

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• Information on vehicle fuel economy, advanced 

technoogy, and possible tax incentives, including a down 

loadable version of the Fuel Economy Guide: 

www.fueleconomy.gov 

• Information on CAFE, including CAFE standards, NHT 

SA’s annual report summarizing the fuel economy performance of the current fleet, rulemaking activities, and 

fines collected: 

www.nhtsa.dot.gov/portal/site/nhtsa/menuitem. 

d0b5a45b55bfbe582f57529cdba046a0/ 

• The IRS’s Gas Guzzler Tax form (IRS Form 6197): 

www.irs.gov/pub/irs-pdf/f6197.pdf 

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