June 07, 2024 Blog

CAFE: The Last of the Big 3 Federal Tailpipe Rules

By John Bozzella

The last of the big three federal tailpipe rules for light-duty vehicles is out.

EPA’s greenhouse gas emissions and criteria pollutant rules and the Energy Department’s petroleum equivalency factor (PEF) rule both dropped back in March. 

Today comes the Department of Transportation’s new Corporate Average Fuel Economy (CAFE) rule for model years 2027 and later. CAFE measures the fuel economy of all the vehicles across a manufacturer’s product lineup.

Over the last year or so, we made this point to the Biden administration: these interconnected tailpipe regulations only work… if they work together.

We had a specific concern about the CAFE rule proposed last year.

Should an automaker be considered in violation of CAFE rules (and subject to billions of dollars in civil penalties) if it complies with the standards established by EPA’s new greenhouse gas rules?

No, they shouldn’t.

And… at first glance, the final CAFE rule seems to say as much.

Those fines wouldn’t have produced any environmental benefits or additional fuel economy and would’ve foolishly diverted automaker capital away from the massive investments required by the electric vehicle transition.

It looks like the left hand knew what the right hand was doing. That’s the kind of coordination we recommended. So that’s good and appreciated.

That said…

At some point we’ll need to talk about whether there’s really a need for CAFE in a world rapidly moving toward electrification.

CAFE’s a relic of the 1970s – a policy to promote energy conservation and energy independence by making internal combustion vehicles more efficient.

But those vehicles are already very efficient. And EVs? They don’t combust anything. They don’t even have a tailpipe!

That’s for later...

For today, the administration appears to have landed on a CAFE rule that works with the other recent federal tailpipe rules.

John Bozzella is president and CEO of Alliance for Automotive Innovation.