Special Topics in Environmental Management

Automakers are Reducing GHG Emissions

Two reports issued by the EPA indicate that automakers are reducing tailpipe greenhouse gas (GHG) emissions, meeting their GHG-reduction requirements, and increasing fuel economy. The Agency describes the first report, Light-Duty Automotive Technology, Carbon Dioxide Emissions, and Fuel Economy Trends: 1975–2017 (Trends Report), as “the authoritative reference for real world fuel economy, technology trends and tailpipe carbon dioxide (CO2) emissions for new personal vehicles sold in the U.S. every year since 1975.” The Trends Report does not provide formal compliance values for EPA’s CO2 emissions standards and the corporate average fuel economy (CAFE) standards issued by the National Highway Traffic Safety Administration (NHTSA). That information is contained in the Agency’s second report, Manufacturer Performance Report for the 2016 Model Year (Performance Report).

“The greatest value of the historical Trends database is the documentation of long-term trends,” the EPA states. “Since MY [model year] 2004, CO2 emissions and fuel economy have improved in 10 out of 12 years, and decreased only twice. CO2 emissions have decreased by 102 grams per mile [g/mi], or 22 percent, and fuel economy has increased by 5.4 mpg [miles per gallon], or 28 percent, with an average annual improvement of about 0.5 mpg per year.”

Statistics in the Performance Report are tainted by allegations against several major automakers that used emissions defeat devices in their fleets—one manufactured for the period 2014 to 2016 and the second for the period 2009 to 2016. In the report, the EPA uses the CO2 emissions and fuel economy data from the initial certification of these vehicles; these data will need to be adjusted in future reports should the investigation and corrective actions yield different CO2 and fuel economy data.

Highlights from the two reports include the following:

Trends Report

  • The final MY 2016 adjusted real-world CO2 emissions rate for all new personal vehicles is 359 g/mi, a 2-g/mi decrease from MY 2015 and the lowest level ever.
  • The MY 2016 adjusted fuel economy is 24.7 mpg, 0.1 mpg higher than MY 2015 and a record high.

Both cars and trucks reached record adjusted fuel economy in MY 2016. The average MY 2016 adjusted fuel economy for cars increased to 28.5 mpg, a 0.3-mpg increase over MY 2015. MY 2016 trucks also increased 0.1 mpg to 21.2 mpg.

  • Preliminary MY 2017 adjusted CO2 emissions are projected to be 352 g/mi, and fuel economy is projected to be 25.2 mpg, which would be a further improvement over MY 2016. These values are based on production estimates provided by automakers throughout 2016.
  • For nearly 2 decades through MY 2004, on a fleetwide basis, automotive technology innovation was generally utilized to support vehicle attributes other than CO2 emissions and fuel economy, such as weight, performance, utility, and other attributes. Beginning in MY 2005, technology has generally been used to increase both fuel economy (which has reduced CO2 emissions) and power, while keeping vehicle weight relatively constant.
  • The average weight for new vehicles produced in MY 2016 was 4,035 pounds, which was unchanged from MY 2015, although the weight of an average new car fell by 23 pounds, and the weight of an average new truck fell by 24 pounds. The 2.1 percent increase in truck share offset the weight reductions in cars and trucks, so that overall new vehicle weight was relatively unchanged.

Performance Report

No manufacturer is yet out of compliance with the GHG program in any of these first five MYs; their performance in subsequent years, and whether deficits can be successfully offset using future credits (either generated or acquired), will ultimately determine final compliance. (Individual MY performance does not directly determine MY compliance or noncompliance. Manufacturers with deficits in a MY may use credits carried over from a previous MY to offset a deficit.)

Overall industry performance in MY 2016 was 9 g/mi higher than required by the 2016 GHG emissions standard. This makes 2016 the first MY in which the industry generated a GHG emissions deficit, after generating credits in each of the first 4 years of EPA’s program. The increases in stringency in the standards in the 2015 and 2016 MYs were the largest increases in the first phase of EPA’s GHG program; since MY 2014, the standards have decreased by 24 g/mi.

A contributing factor to the 9-g/mi industrywide gap between performance and the standard in MY 2016 was the expiration of flexible fuel vehicle credits. Due to the credits accumulated in the previous 4 years and early credits generated by some manufacturers in the 2009–2011 MYs, some of which were used to offset the 2016 deficit, the industry as a whole does not face any noncompliance issues in MY 2016.

Unlike the previous 4 years in which generating credits was the norm, most large manufacturers (with sales greater than 150,000 vehicles) generated deficits in MY 2016.

The majority of manufacturers, representing 99 percent of MY 2016 U.S. sales, reported compliance with the standards for the 2012–2016 MYs. In fact, 19 of 21 manufacturers are reporting a nonnegative credit balance going into MY 2017, meaning that these manufacturers have met the standards in all of the 2012–2016 MYs (credits cannot be carried forward if a deficit exists in a prior MY). Manufacturers are allowed to carry deficits forward for three MYs.

The Trends Report is here. The Performance Report is here.

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