Corporate Average Fuel Economy
The Corporate Average Fuel Economy (CAFE) are regulations in the United States, first enacted by US Congress in 1975,[1] and intended to improve the average fuel economy of cars and light trucks (trucks, vans and sport utility vehicles) sold in the US in the wake of the 1973 Arab Oil Embargo. Historically, it is the sales-weighted harmonic mean fuel economy, expressed in miles per gallon (mpg), of a manufacturer's fleet of current model year passenger cars or light trucks with a gross vehicle weight rating (GVWR) of 8,500 pounds (3,856 kg) or less, manufactured for sale in the US.
This system would have changed with the introduction of "Footprint" regulations for light trucks binding in 2011, but the 9th Circuit Court of Appeals returned that rule for reconsideration for, among other things, being "arbitrary and capricious".[2] The most recent revision of CAFE, passed in 2007, bumped the light-truck exemption (which includes SUVs and passenger vans as well as pickup trucks) from 8,500 lb (3,900 kg) to 10,000 lb (4,500 kg) GVWR, but continued to maintain separate standards and separate bins for "passenger cars" and "light trucks", despite the majority of "light trucks" actually being used as passenger cars. More than half a million model-year-1999 vehicles exceeded the 8500-pound GVWR and were omitted from CAFE calculations.[3] In 2011, the standard will change to include many larger vehicles.[4] The US and Canada have the weakest standards in terms of fleet-average fuel economy rating among first world nations, e.g. 25 mpg in the US, versus 45 mpg in the European Union and higher in Japan (2008).[5]
The National Highway Traffic Safety Administration (NHTSA) regulates CAFE standards and the US Environmental Protection Agency (EPA) measures vehicle fuel efficiency. US Congress specifies that CAFE standards must be set at the "maximum feasible level" given consideration for:
- technological feasibility;
- economic practicality;
- effect of other standards on fuel economy;
- need of the nation to conserve energy.
Historically, the EPA has encouraged consumers to buy more fuel efficient vehicles, while the NHTSA expressed concerns that smaller, more fuel efficient vehicles may lead to increased traffic fatalities.[6][7] Thus higher fuel efficiency was associated with lower traffic safety, intertwining the issues of fuel economy, road-traffic safety, air pollution, and climate change. In the mid 2000s, increasing safety of smaller cars and the poor safety record of light trucks began to reverse this association.[8]
If the average fuel economy of a manufacturer's annual fleet of car and/or truck production falls below the defined standard, the manufacturer must pay a penalty, currently $5.50 USD per 0.1 mpg under the standard, multiplied by the manufacturer's total production for the U.S. domestic market.
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