U.S. Raises Fuel-Efficiency Requirements for Cars and Light Trucks

The rules are the primary way the federal government addresses climate change via the transportation sector, the country’s largest source of greenhouse gas emissions. Since President Biden was a candidate, he has promised to raise standards for cars and trucks, along with similar proposals targeting emissions from power plants and oil-and-gas companies.

“We are setting robust and rigorous standards that will aggressively reduce the pollution that is harming people and our planet—and save families money at the same time,” EPA Administrator Michael Regan said in a statement.

The move, central to Mr. Biden’s environmental agenda, is likely to be overshadowed by new roadblocks facing climate proposals in Congress. Swing vote Sen. Joe Manchin (D., W.Va.), said 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 cut planet-warming emissions than the regulations alone.

The Alliance for Automotive Innovation, the lobbying group for auto makers and suppliers, said it would be difficult to achieve the higher fuel standards without the kinds of measures that were included in Build Back Better.

“EPA’s final rule for greenhouse-gas emissions is even more aggressive than originally proposed, requiring a substantial increase in electric-vehicle sales, well above the 4% of all light-duty sales today,” the group’s president, John Bozzella, said in a statement. “Achieving the goals of this final rule will undoubtedly require enactment of supportive governmental policies—including consumer incentives, substantial infrastructure growth, fleet requirements, and support for U.S. manufacturing and supply-chain development,” he said.

Under pressure from environmentalists, consumer advocates and their allies within the White House, the EPA got more aggressive in the final rule than it had in a proposal announced formally in August. The package that Mr. Regan signed Monday limits auto makers’ flexibility in how they account for their fleets’ emissions. In theory, this reduces pollution more quickly. It also makes it harder for the companies to comply.

Auto makers, which had cheered the August proposal, have said those changes may undermine the program. More hard-line rules are likely to raise upfront costs, which could discourage consumer adoption of zero-emissions cars and trucks, a problem that could get worse if Congress fails to approve other subsidies, lobbyists said.

The EPA said the new rules would save U.S. drivers between $210 billion and $420 billion in fuel costs through 2050. Even after factoring in higher purchase prices, each buyer would still save about $1,000 over the lifetime of the vehicle from model year 2026 on, the EPA said.

Monday’s announcement marks the latest in a series of changes to U.S. fuel-efficiency standards.

Mr. Biden’s new package effectively restores rules from the Obama administration that had eased under former President Donald Trump. The Trump-era rules will stay in effect through model year 2022, but in the next year auto fleets will have to increase efficiency by 9.8%. After that, the standards will increase 5% to 10% annually, reaching 55 miles a gallon in 2026.

That 55 mpg requirement equates to an estimated 40 mpg in real-world stop-and-go driving, the EPA said.

Write to Timothy Puko at [email protected] and Katy Stech Ferek at [email protected]