Regulatory Announcement

EPA and NHTSA Finalize Historic 

National Program to Reduce 

Greenhouse Gases and Improve 

Fuel Economy for Cars and Trucks 

The U.S. Environmental Protection Agency (EPA) and the 

Department of Transportation’s National Highway Traffic Safety 

Administration (NHTSA) are finalizing a joint rule to establish a 

national program consisting of new standards for model year 2012 

through 2016 light-duty vehicles that will reduce greenhouse gas 

emissions and improve fuel economy. EPA is finalizing the first-ever 

national greenhouse gas (GHG) emissions standards under the Clean 

Air Act, and NHTSA is finalizing Corporate Average Fuel Economy 

(CAFE) standards under the Energy Policy and Conservation Act. 

The new standards apply to new passenger cars, light-duty trucks, and mediumduty passenger vehicles, covering model years 2012 through 2016. The EPA GHG 

standards require these vehicles to meet an estimated combined average emissions 

level of 250 grams of carbon dioxide (CO2) per mile in model year 2016, equivalent 

to 35.5 miles per gallon (mpg) if the automotive industry were to meet this CO2 level 

all through fuel economy improvements. 

These final rules were developed in response to President Obama’s call for a strong 

and coordinated federal greenhouse gas and fuel economy program. At the same 

time, the national program allows automobile manufacturers to build a single lightduty national fleet that satisfies all requirements under both Federal programs and the 

standards of the State of California and other states that have adopted the California 

standards. The national program therefore provides critical nationwide environmental 

and energy benefits while ensuring that consumers have a full range of vehicle choices. 

Office of Transportation and Air Quality

EPA-420-F-10-014

April 2010
Regulatory Announcement

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Need to Reduce Greenhouse Gas (GHG) Emissions and Improve Fuel 

Economy from Passenger Cars and Light Trucks 

The rules will simultaneously reduce greenhouse gas emissions, improve energy security, increase 

fuel savings, and provide clarity and predictability for manufacturers. 

Climate change is one of the most significant long-term threats to public health and the global 

environment. It is caused by an excess of greenhouse gases in the atmosphere which effectively 

trap some of the Earth’s heat that would otherwise escape into space. Greenhouse gases are both 

naturally occurring and anthropogenic. Greenhouse gases emitted as a result of human activities 

include carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, and 

sulfur hexafluoride. 

The key effects of climate change observed to date and projected to occur in the future include, 

but are not limited to, more frequent and intense heat waves, more severe wildfires, degraded 

air quality, heavier and more frequent downpours and flooding, increased drought, greater sea 

level rise, more intense storms, harm to water resources, continued ocean acidification, harm to 

agriculture, and harm to wildlife and ecosystems. 

Improving energy security by reducing our dependence on oil has been a national objective 

since the first oil price shocks in the 1970s. Tight global oil markets led to prices over $100 per 

barrel in 2008, with gasoline reaching as high as $4 per gallon in many parts of the U.S., causing 

financial hardship for many families. The light-duty vehicles subject to this national program 

account for about 40 percent of all U.S. oil consumption. 

Mobile sources emitted 31 percent of all U.S. GHG emissions in 2007 (transportation sources, 

which do not include certain off-highway sources, account for 28 percent) and have been the 

fastest-growing source of U.S. GHG emissions since 1990.1

 Mobile sources addressed in the 

recent endangerment and contribution findings under CAA section 202(a)--light-duty vehicles, 

heavy-duty trucks, buses, and motorcycles--accounted for 23 percent of all U.S. GHG in 2007.2

Light-duty vehicles emit four GHGs--CO2, methane, nitrous oxide, and hydrofluorocarbons--and 

are responsible for nearly 60 percent of all mobile source GHGs and over 70 percent of Section 

202(a) mobile source GHGs. For light-duty vehicles in 2007, CO2 emissions represent about 94 

percent of total greenhouse emissions (including HFCs), and the CO2

 emissions measured by EPA 

fuel economy compliance tests represent about 90 percent of all greenhouse gas emissions.3,4

Benefits and Costs of the National Program

Over the lifetime of the vehicles sold during 2012-2016, this national program is projected to 

reduce U.S. greenhouse gas emissions by 960 million metric tons and save 1.8 billion barrels of 

oil. In total, the combined EPA and NHTSA 2012-2016 standards will reduce GHG emissions 

from the U.S. light-duty fleet by approximately 21 percent by 2030 over the level that would 

occur in the absence of the national program.
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 EPA estimates that the lifetime cost of 2012-2016 model year vehicles under the national 

program are less than $52 billion, well below the expected benefits, which are expected to be 

approximately $240 billion. The monetized benefits include the effects of the program on fuel 

savings, CO2

 reductions, particulate matter (PM2.5) benefits, improved energy security, and 

other impacts such as the value of less frequent refueling, the value of increased driving, and 

the monetized impact of increased traffic congestion, motor vehicle crashes, and noise. There 

are also potential impacts of the rule that are not quantified and monetized in the model year 

analysis, including the health and environmental impacts associated with changes in ambient 

exposures to toxic air pollutants and ozone, and the benefits associated with avoided non-CO2

GHGs (methane, nitrous oxide, HFCs).The national program is comprised of the two agencies’ 

standards, and this discussion of costs and benefits of EPA’s GHG standards does not change the 

fact that both the CAFE and greenhouse gas standards, jointly, are the source of the majority of 

the program’s benefits and costs.

Benefits to Consumers

Together, EPA and NHTSA estimate that the average cost increase for a model year 2016 

vehicle due to the national program will be approximately $950.   U.S. consumers who pay for 

their vehicle in cash will save enough in lower fuel costs over the first three years, on average, 

to offset these higher vehicle costs. However, most US consumers purchase a new vehicle using 

credit rather than paying cash. Consumers using an average 5-year, 60-month loan would see 

immediate savings due to their vehicle’s lower fuel consumption in the form of reduced annual 

costs of $130-$180 a year throughout the duration of the loan (that is, the fuel savings will outweigh the increase in loan payments by $130-$180 per year). 

Whether a consumer takes out a loan or pays for their vehicle in cash, consumers would save 

more than $3,000 over the lifetime of a model year 2016 vehicle (that is, the $4,000 saved on 

fuel easily offsets the increased cost of the vehicle). To calculate these fuel savings, fuel prices 

(including taxes) were estimated to range from $2.61/gallon in 2012, to $3.60/gallon in 2030, to 

$4.49/gallon in 2050, based on Department of Energy projections.

EPA’s Standards

EPA is finalizing a set of fleet-wide average carbon dioxide (CO2) emission standards for cars and 

trucks. These standards are based on CO2

 emissions-footprint curves, where each vehicle has a 

different CO2 emissions compliance target depending on its footprint value (related to the size 

of the vehicle). Generally, the larger the vehicle footprint, the higher the corresponding vehicle 

CO2 emissions target. As a result, the burden of compliance is distributed across all vehicles and 

all manufacturers. Manufacturers are not compelled to build light vehicles of any particular size 

or type, and each manufacturer will have its own fleet-wide standard which reflects the vehicles 

it chooses it produce. 

Table 1 shows the projected fleet-wide CO2

 emission level requirements under the footprint-based 

approach. The car requirements are projected to increase in stringency from 263 to 225 grams 

per mile between model year 2012 and model year 2016. Similarly, fleet-wide CO2

 emission 
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level requirements for trucks are projected to increase in stringency from 346 to 298 grams 

per mile. EPA projects that the average light vehicle (combined car and truck) tailpipe CO2

compliance level in model year 2012 will be 295 grams per mile while the average vehicle 

tailpipe CO2 emissions compliance level for the model year 2016 standard is projected to be 

250 grams per mile, corresponding to 35.5 mpg in model year 2016, if all reductions were made 

through fuel economy improvements. 

Table 1 - Projected Fleet-Wide Emissions Compliance Levels under the FootprintBased CO2

 Standards (g/mi) and Corresponding Fuel Economy (mpg)

2012 2013 2014 2015 2016

Passenger Cars (g/mi) 263 256 247 236 225

Light Trucks (g/mi) 346 337 326 312 298

Combined Cars & Trucks (g/mi) 295 286 276 263 250

Passenger Cars (mpg) 33.8 34.7 36.0 37.7 39.5

Light Trucks (mpg) 25.7 26.4 27.3 28.5 29.8

Combined Cars & Trucks (mpg) 30.1 31.1 32.2 33.8 35.5

Figures 1 and 2 show the actual footprint curves for cars and trucks. It is important to note that 

for the car standard curves shown in Figure 1 most model year 2012 - 2016 vehicle footprints are 

between 40-55 square feet. For the truck standard curves in Figure 2 most model year 2012 - 2016 

truck footprints are between 45-65 square feet. Example footprint targets for popular vehicle 

models are shown in Table 2, illustrating the fact that different vehicle sizes will have varying 

CO2

 emissions and fuel economy targets under the footprint-based standards. Vehicle CO2

emissions will be measured over the EPA city and highway tests. 
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Table 2 - Model Year 2016 CO2 and Fuel Economy Targets for 

Various Model Year 2008 Vehicle Types

Vehicle Type

Example Models Example Model 

Footprint (sq. ft.)

EPA CO2

Emissions Target

(g/mi)

NHTSA Fuel 

Economy Target

(mpg)

Example Passenger Cars

Compact car Honda Fit 40 206 41.1

Midsize car Ford Fusion 46 230 37.1

Full-size car Chrysler 300 53 263 32.6

Example Light-duty Trucks

Small SUV 4WD Ford Escape 44 259 32.9

Midsize crossover Nissan Murano 49 279 30.6

Minivan Toyota Sienna 55 303 28.2

Large pickup truck Chevy Silverado 67 348 24.7

EPA is allowing auto manufacturers to earn credits toward the fleet-wide average CO2 standards 

for improving air conditioning systems, such as reducing both hydrofluorocarbon (HFC) 

refrigerant losses (i.e. system leakage) and indirect CO2

 emissions related to the increased load 

on the engine. Earning credits for these types of greenhouse gas reductions is conditioned on 

demonstrated improvements in vehicle air conditioner systems, including both efficiency and 

refrigerant leakage improvement. Other program flexibilities, such as flex-fuel vehicle credits, 

temporary lead-time allowance, and advanced technology credits, will also be available to 

qualified auto manufacturers and are explained more fully below.

EPA’s and NHTSA’s technology assessment indicates there is a wide range of technologies 

available for manufacturers to use when upgrading vehicles to reduce greenhouse gas emissions 

and improve fuel economy. These include engine improvements, such as use of gasoline direct 

injection and downsized engines that use turbochargers to provide performance similar to that 

of larger engines, the use of advanced transmissions, increased use of start-stop technology, 

improvements in tire performance, reductions in vehicle weight, increased use of hybrid and 

other advanced technologies, and the initial commercialization of electric vehicles and plugin hybrids. EPA is also projecting improvements in vehicle air conditioners including more 

efficient as well as low leak systems. All of these technologies are already available today, and 

EPA’s and NHTSA’s assessment is that manufacturers would be able to meet the standards 

through more widespread use of these technologies across their fleet.

EPA is also setting standards to cap tailpipe nitrous oxide (N2O) and methane (CH4) emissions 

at 0.010 and 0.030 grams per mile, respectively. Even after adjusting for the higher relative 

global warming potencies of these two compounds, nitrous oxide and methane emissions 

represent less than one percent of overall vehicle greenhouse gas emissions from new vehicles. 
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EPA’s Program Flexibilities

EPA’s and NHTSA’s programs provide compliance flexibility to manufacturers, especially in the 

early years of the national program. This flexibility is expected to provide sufficient lead time for 

manufacturers to make necessary technological improvements and reduce the overall cost of the 

program, without compromising overall environmental and fuel economy objectives.

EPA is establishing a system of averaging, banking, and trading (ABT) of credits integral to 

the fleet averaging approach, based on a manufacturer’s fleet average CO2

 performance. This 

approach would allow credit trading among all vehicles a manufacturer produces, both cars and 

light trucks. Credit trading between companies will also be permitted. This program is similar to 

ABT programs EPA has established in other programs for motor vehicles. EPA is also including 

credits for improved air conditioning performance (both reduced leakage of refrigerant and 

improved air conditioner efficiency).

EPA is also finalizing several additional credit provisions. These include credits based on the 

use of advanced technologies, and generation of credits for superior greenhouse gas emission 

reduction performance prior to model year 2012. These credit programs will provide flexibility 

to manufacturers, which may be especially important during the early transition years of the 

program. In addition, both NHTSA and EPA are continuing to offer credits for vehicles 

designed to operate on alternative fuels, although these credits will no longer be available after 

model year 2015 under the EPA greenhouse gas program.

Flex-fuel and Alternative Fuel Vehicle Credits - EPA is allowing Flex Fuel Vehicle or FFV 

credits in line with limits established under the Energy Independence and Security Act 

of 2007 during model years 2012 to 2015. After model year 2015, EPA will determine 

alternative fuel vehicle emission values based on a vehicle’s actual emissions while 

operating on gasoline as well as on the alternative fuel and a demonstration of actual 

alternative fuel use. FFVs are vehicles that can run both on an alternative fuel and 

conventional fuel. Most FFVs are E-85 capable vehicles, which can run on either 

gasoline or a mixture of up to 85 percent ethanol and 15 percent gasoline. Dedicated 

alternative fuel vehicles are vehicles that run exclusively on an alternative fuel.

Optional Temporary Lead-time Allowance Alternative Standards (TLAAS) - Manufacturers with 

limited product lines that have traditionally paid fines to NHTSA in lieu of meeting 

Corporate Average Fuel Economy (CAFE) standards may find it especially challenging 

to comply with the greenhouse gas emission standards. Under the Clean Air Act, 

manufacturers of light duty motor vehicles cannot pay fines in lieu of complying with 

motor vehicle emissions standards. However, EPA is finalizing an optional, temporary 

alternative standard provision, which is less stringent, to provide these manufacturers 

sufficient lead time to meet the tougher model year 2016 greenhouse gas standards, while 

preserving consumer choice of vehicles during this time. 

There are two different groups of manufacturers to which this temporary standard applies. 

Manufacturers that produce between 50,000 and 400,000 model year 2009 vehicles in 

the U.S. would be allowed to establish a separate averaging fleet comprising on average 

25,000 vehicles per year (and no more than 100,000 total vehicles during this four 
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year period). This separate, limited vehicle fleet would be subject to a less stringent 

greenhouse gas standard of 125 percent of the vehicle’s otherwise applicable foot-print 

target level. The separate fleet could not generate credits for use by the remainder 

of the manufacturer’s fleet. Because of their more limited product lines and higher 

baseline CO2

 emissions compared with other TLAAS manufacturers, manufacturers 

producing less than 50,000 model year 2009 vehicles in the U.S. would be allowed to 

place up to 200,000 vehicles in the TLAAS program between model years 2012-2015 

and an additional 50,000 vehicles in model year 2016. The manufacturers would need 

to demonstrate that they have attempted to purchase credits from other manufacturers 

in order to comply with the base TLAAS program, but that sufficient credits were not 

available.

In model year 2016 (or 2017 for manufacturers below 50,000 vehicle sales), the TLAAS 

option ends, and all manufacturers, regardless of size, must comply with the same CO2

standards, while under the CAFE program companies would continue to be allowed to 

pay civil penalties in lieu of complying with the CAFE standards. However, because 

companies must meet both the CAFE standards and the EPA CO2

 standards, the 

national program in effect means that companies will not have the civil penalty option, 

thereby resulting in more fuel savings and CO2

 reductions than would be the case under 

the CAFE program alone. 

Manufacturers selling fewer than 5,000 vehicles in the U.S. will be deferred from this 

rulemaking. These manufacturers have extremely limited vehicle product lines across 

which to average, have typically paid fines under the CAFE program due to the very 

high CO2

 emissions of their vehicles, and need additional lead time to bring their 

vehicles into compliance with the GHG standards. EPA plans to set CO2

 standards 

for these smallest manufacturers through a separate rulemaking to be completed in the 

next 18 months. EPA estimates that small volume manufacturers comprise less than 0.1 

percent of the total light-duty vehicle sales in the U.S., thus the deferment will have a 

very small impact on the GHG emission reductions from this rule.

Advanced Technology Credits - EPA is finalizing a temporary incentive program to encourage 

the early commercialization of advanced greenhouse gas/fuel economy control 

technologies, such as electric vehicles, plug-in hybrid electric vehicles, and fuel cell 

vehicles. In this program, manufacturers who produce advanced technology vehicles will 

be able to assign a zero gram per mile CO2

 emissions value to the first 200,000 vehicles 

sold in model years 2012-2016 (for PHEVs, the zero gram per mile value applies only to 

the percentage of miles driven on grid electricity), or 300,000 vehicles for manufacturers 

that sell 25,000 vehicles or more in model year 2012. The CO2

 emissions compliance 

levels for advanced technology vehicles sold beyond these cumulative vehicle 

production caps will account for the net increase in upstream CO2

 emissions relative to 

a comparable gasoline vehicle. EPA will reassess the issue of how to address advanced 

technology vehicle emissions in future rulemakings for MY2017 and beyond, based 

on the status of their commercialization, upstream GHG control programs, and other 

factors. 

Off-Cycle Innovative Technology Credits - EPA is finalizing a credit opportunity for new and 

innovative technologies that reduce vehicle CO2

 emissions, but whose CO2 reduction 

benefits are not captured over the 2-cycle test procedure used to determine compliance 
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with the fleet average standards (i.e., “off-cycle”). Eligible innovative technologies include 

those that are used in one or more current vehicle models, but that are not yet in 

widespread use in the light-duty fleet. Further, any credits for these off-cycle technologies 

must be based on real-world greenhouse gas emission reductions not captured on the 

current 2-cycle tests and verified by test methods that represent average U.S. driving 

conditions. 

Early Credits - EPA is finalizing a program to allow manufacturers to generate early credits 

in model years 2009-2011. Credits may be generated through early additional fleet 

average CO2

 reductions, early A/C system improvements, early advanced technology 

vehicle credits, and early off-cycle credits. As with other credits, early credits are subject 

to a five year carry-forward limit based on the model year in which they are generated. 

Manufacturers may transfer early credits between vehicle categories (e.g., between 

the car and truck fleet). With the exception of model year 2009 early program credits, 

a manufacturer may trade other early credits to other manufacturers without limits. 

CAFE credits earned in model years prior to model year 2011 will still be available to 

manufacturers for use in the CAFE program in accordance with applicable regulations.

Background on EPA’s Final Rule 

EPA’s final rule represents the second phase of its response to the Supreme Court’s 2007 decision 

in Massachusetts v. EPA, which held that greenhouse gases were air pollutants for purposes of 

the Clean Air Act (CAA). The Court held that the Administrator must determine whether 

or not emissions of greenhouse gases from new motor vehicles and new motor vehicle engines 

cause or contribute to air pollution which may reasonably be anticipated to endanger public 

health or welfare, or whether the science is too uncertain for EPA to make a reasoned decision. 

The Court remanded the case back to the Agency for reconsideration in light of its holding. 

The Administrator has responded to the Court’s remand by issuing two findings under section 

202(a) of the Clean Air Act.5

 First, the Administrator found that the current and projected 

concentrations of the six key well-mixed greenhouse gases -- carbon dioxide (CO2

), methane 

(CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and 

sulfur hexafluoride (SF6) -- in the atmosphere threaten the public health and welfare of 

current and future generations. This is referred to as the endangerment finding. Second, the 

Administrator found that the combined emissions of these well-mixed greenhouse gases from 

new motor vehicle and new motor vehicle engines contribute to the greenhouse gas pollution 

which threatens public health and welfare. This is referred to as the cause or contribute 

finding. New motor vehicles and engines emit carbon dioxide, methane, nitrous oxide, and 

hydrofluorocarbons. 

Specifically, the Administrator found, after a thorough examination of the scientific evidence 

on the causes and impact of current and future climate change, and careful review of public 

comments, that the science compellingly supports a positive finding that atmospheric 

concentrations of these greenhouse gases result in air pollution which may reasonably be 

anticipated to endanger both public health and welfare. 
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For More Information 

You can access the rule and related documents on EPA’s Office of Transportation and Air 

Quality (OTAQ) Web site at: 

www.epa.gov/otaq/climate/regulations.htm 

For more information on this rule, please contact Tad Wysor at: 

U.S. Environmental Protection Agency 

Office of Transportation and Air Quality 

2000 Traverwood Drive

Ann Arbor, MI 48105 

(734) 214-4332 

E-mail: wysor.tad@epa.gov

1

U.S. Environmental Protection Agency. 2009. Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2007. 

EPA 430-R-09-004. Available at: 

http://epa.gov/climatechange/emissions/downloads09/GHG2007entire_report-508.pdf 

2

U.S. EPA. 2009 Technical Support Document for Endangerment and Cause or Contribute Findings for Greenhouse Gases 

under Section 202(a) of the Clean Air Act.

Washington, DC. pp. 180-194. Available at: 

http://epa.gov/climatechange/endangerment/downloads/Endangerment%20TSD.pdf 

3

U.S. Environmental Protection Agency. 2009. Inventory of

U.S. Greenhouse Gas Emissions and Sinks: 1990-2007. EPA 430-R-09-004. Available at: 

http://epa.gov/climatechange/emissions/downloads09/GHG2007entire_report-508.pdf

4

U.S. Environmental Protection Agency. Regulatory Impact Analysis, Chapter 2. EPA-420-R-09-xxx. Available at: 

http://www.epa.gov/otaq/climate/regulations.htm

5

See 74 FR 66496 (Dec. 15, 2009) for Endangerment and Cause or Contribute Findings for Greenhouse Gases

Under Section 202(a) of the Clean Air Act