DETROIT — Following his recent appointment as the U.S. Secretary of Transportation, Sean Duffy immediately targeted the federal regulations governing fuel economy for vehicles, which also serve as a vital mechanism for managing air pollution and tackling climate change. He has instructed the National Highway Traffic Safety Administration (NHTSA) to promptly revise or eliminate these standards, originally established during the energy crisis of the 1970s, aimed at fuel conservation and consumer savings at fuel stations.
Here are five key insights into this development.
What actions is the administration taking?
Duffy has mandated that the NHTSA’s top officials “suggest the revocation or alteration of any fuel economy standards” required to synchronize with the administration’s focus on promoting both oil and biofuels. In a memorandum released by the Department of Transportation (DOT) on Tuesday evening, he emphasized the need to amend the existing Corporate Average Fuel Economy (CAFE) standards, highlighting their contradiction to the current administration’s policy goals.
Duffy, a former Republican congressman from Wisconsin lacking prior transportation experience, affirmed during his confirmation hearing that he would prioritize ensuring safe operations for Boeing aircraft, reducing regulatory measures, and supporting local self-driving tech ventures. He has also openly expressed skepticism regarding climate change.
The NHTSA secretary would be required to commence a comprehensive rule-making process to implement more relaxed standards, a procedure that previously took about two years during Trump’s first term. Initially, upon taking office back then, regulations set by the Obama administration called for a 5% annual increase in fuel efficiency; however, changes implemented by Trump’s DOT modified this requirement to just a 1.5% annual rise up until 2026.
What implications does this have for consumers and environmental efforts?
According to Duffy, revoking these regulations will enhance access to various affordable gasoline vehicles for American consumers. Nevertheless, critics argue otherwise. Dan Becker, director of the Center for Biological Diversity’s Safe Climate Transport Campaign, warned that this move will likely elevate costs at the gas pump, escalate tailpipe emissions, and jeopardize the future viability of American automakers, ultimately benefiting only oil corporations and allowing the Chinese auto industry to expand its market for electric vehicles with less U.S. competition.
In recent times, automakers have been delivering gasoline-powered vehicles that achieve markedly better fuel efficiency, which leads to reduced driving costs while negatively impacting revenue for oil companies, including refineries and producers. The Environmental Protection Agency noted that transportation accounted for the largest share of U.S. greenhouse gas emissions in 2022. Every droplet of gasoline consumed adds carbon into the atmosphere, with carbon dioxide particles contributing to prolonged heat retention for over a century.
Why does the Trump administration desire to eliminate fuel efficiency regulations?
Duffy’s directive corresponds with numerous promises made by President Trump, particularly to abolish what he termed an “electric vehicle mandate,” a reference to former President Biden’s goal of achieving 50% electric vehicle sales by 2030. Duffy asserted, “These fuel economy standards are so stringent that automakers face practical challenges in meeting them without quickly diverting production away from internal combustion engines toward alternative electric technologies.”
These standards grant automakers time to adapt their designs and manufacturing processes to meet compliance. The new Secretary cautioned that excessively high standards could drive car manufacturers to terminate gasoline-powered vehicle production, thereby inflating prices for consumers and “eliminating consumer choice at the dealership.”
Experts like Roland Hwang, policy director at the University of California, Davis Institute of Transportation Studies, counter this narrative, arguing that such regulatory inconsistency threatens countless automotive jobs and investments while undermining the competitiveness of the American auto sector globally. Strong fuel economy regulations are deemed essential for driving investment into necessary advanced technologies.
Importantly, automakers are not mandated to produce electric vehicles, nor are consumers obligated to purchase them. The fuel economy standards work in conjunction with EPA carbon dioxide limits for vehicles to actively combat climate change, a notion that has been denied by Trump.
“It makes sense for the new leadership at the DOT to reassess existing fuel economy standards,” remarked John Bozzella, president and CEO of the Alliance for Automotive Innovation, a conglomerate that represents the automobile industry. He noted that the current CAFE rules present significant challenges to comply with, potentially incurring billions of dollars in civil penalties for automakers.
According to Duffy, the CAFE regulations should establish achievable benchmarks for vehicle fleets operating on liquid fuels such as gasoline and diesel, citing the country’s ample oil reserves, biofuels, and refining capabilities as justification for adjusting the standards downward.
What is the rationale behind American fuel economy regulations?
The CAFE standards trace back to the oil crises experienced in the 1970s, with initial regulations implemented by 1978 aimed at curtailing fuel usage through average mile-per-gallon targets for automakers. These standards saw progress for some time, but advancements stagnated during the 1980s, leading to nearly two decades without significant improvements.
However, in recent years, vehicle manufacturers have successfully marketed gasoline-powered vehicles capable of achieving far better mileage, largely attributed to stricter regulatory frameworks.
What was the intention of the latest fuel economy rules?
The most recent standards established under the Biden administration mandated that automakers average approximately 38 miles per gallon by 2031 during real driving conditions; in contrast, the current average stands at about 28 miles per gallon. Under these regulations, manufacturers are expected to escalate fuel economy by 2% per year for passenger vehicles from 2027 to 2031, while similar increases apply to SUVs and light trucks during 2029 to 2031.
These standards were coordinated with tighter EPA regulations designed to limit pollution from commercial and passenger vehicles, as well as Biden’s broader encouragement of electric vehicle production and sales.
When implementing these new regulations, the Biden administration projected significant savings on gasoline consumption, estimating a reduction of roughly 70 billion gallons by 2050. Bozzella added that since the oversight of U.S. tailpipe emissions extends across multiple federal agencies, the changes proposed by the Trump administration regarding CAFE standards will require synchronization with existing emissions regulations governed by both the EPA and the Department of Energy.
