In the most aggressive governmental automotive legislation yet, the U.S. Department of Transportation (DOT) and the U.S. Environmental Protection Agency (EPA) have issued a new set of regulations that require major gains in Corporate Average Fuel Economy (CAFE) numbers between 2012-2016 as well a mandate the first-ever ceiling on vehicle-related greenhouse gas emissions.

Officially issued by DOT's National Highway Traffic Safety Administration (NHTSA) and the EPA under provisions of the Clean Air Act, the new rules state automakers must improve fleet-wide fuel economy and reduce fleet-wide greenhouse gas emissions by approximately five percent every year, a demand that will result in an estimated 34.1 mpg combined industry-wide fleet average for model year 2016. Because credits for air-conditioning improvements can be used to meet EPA but not NHTSA standards, the EPA standards require that by the 2016 model-year, manufacturers must achieve a combined average-vehicle-emission level of 250 grams of carbon dioxide per mile. Using that standard would be equivalent to the automaker's fleets averaging 35.5 miles per gallon if all reductions came from fuel economy improvements.

Compared to the 2011 model year figures of 27.3 mpg, the government claims these new CAFE and greenhouse gas emission stats for 2016 models would conserve about 1.8 billion barrels of oil and reduce CO2 levels by about 960 million metric tons over the lifetime of the vehicles regulated -- as well as saving their owners an average of $3,000 during that period.

NHTSA and EPA say they expect automakers will be able to meet these standards by more widespread use of conventional existing technologies with respect to engines, transmissions, tires, aerodynamics, and materials plus further improvements in air conditioning systems as well as by embracing hybrid vehicles, clean diesel engines and both full electric and plug-in hybrid models. The new rules are expected to cost carmakers about $52 billion to enact and are expected to add an average of $926 dollars to the cost of each vehicle.

"These historic new standards set ambitious, but achievable, fuel economy requirements for the automotive industry that will also encourage new and emerging technologies," said Transportation Secretary Ray LaHood. "We will be helping American motorists save money at the pump, while putting less pollution in the air."

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