WASHINGTON – President Obama's newly proposed national policy, covering model years 2012-2016, will ultimately require an average fuel economy standard of 35.5 mpg in 2016. The new national policy is projected to save 1.8 billion barrels of oil over the life of the program with a fuel economy gain averaging more than 5 percent per year and a reduction of approximately 900 million metric tons in greenhouse gas emissions, according to a press release issued by the Obama administration.
The new policy would supercede the CAFE law passed by Congress in 2007 requiring an average fuel economy of 35 mpg in 2020, according to the administration.
The Corporate Average Fuel Economy (CAFE) standard is currently 27.5 mpg for cars and 24 mpg for light trucks.
"For seven long years, there has been a debate over whether states or the federal government should regulate autos. President Obama’s announcement ends that old debate by starting a federal rulemaking to set a National Program," said Dave McCurdy, president and CEO, Alliance of Automobile Manufacturers in a press release.
Fleets have already been experiencing the urgency to become "greener" in their vehicle purchases in recent years. Switching to more fuel-efficient vehicles such as hybrids has helped numerous fleets become more environmentally friendly and save on fuel costs.
"In the U.S., fleet operations have already been impacted by changing from six-cylinder engines to four-cylinder engines and strategically placing hybrid vehicles where it makes economic and business sense to do so," said Joe LaRosa, director, global fleet services for Merck & Co., whose fleet topped Automotive Fleet's Top 50 Green Fleets listing this year.
"Green Mountain Power has aggressive goals to achieve 4 percent fuel economy improvement each year across our fleet until 2015...It is exciting to see these same aggressive, yet achievable, goals embraced at the national level," said Rebecca Towne, fleet manager for Green Mountain Power.
However, other fleet managers are a bit skeptical of the new standards.
"I like the idea of increasing the mileage per gallon, however I am not sure that a government mandate is what we need...It might be okay for the short-run with heavy government financial support," said Phil Shreiber, fleet manager, North America, OTIS Service Center.
The Detroit Big Three have all expressed their support for the standards.
"With regulatory clarity and certainty, Chrysler and its alliance partner, Fiat, will now be able to concentrate their resources on developing a nationwide fleet of clean, fuel-efficient vehicles that will help support its revitalization and benefit American consumers," according to a statement released by the automaker.
"Energy security and climate change are national priorities that require federal leadership and the President's direction makes sense for the country and the industry," according to a GM statement.
"Today’s announcement signals the achievement of a crucial milestone – an agreement in principle on a national program for increased fuel economy and reduced greenhouse gases," said Ford President and CEO Alan Mulally in a company statement.
Toyota has also declared its support for the standards. "We welcome the Administration’s leadership in developing a coordinated fuel efficiency and greenhouse gas standard. This is something we have encouraged and sought for a very long time," said Jim Lentz, President, Toyota Motor Sales, USA, Inc. in a company statement.