The Good News (and the Bad Loopholes) on Fuel Economy

Jim Motavalli

Jim Motavalli | May 01, 2014

If the dismayingly slow march to fuel-efficient cars has got you down, there’s reasons both to boo and cheer with a new report on the progress of the federal clean car mandates, which call for fleet averages of 54.5 mpg by 2025. Automakers are hitting their goals, but by the skin of their teeth, and often because of loopholes.

Automakers are fielding green cars, like this 37 mpg Volvo, but they still have a lot of gas guzzlers in the lineup. (Jim Motavalli photo)The new EPA report looks at the 2012 model year, the first leg on the 14-year march to 2025. “Consumers bought cleaner vehicles in the first year of the program than [the 2012 standard] required, and automakers are off to a good start in meeting the program requirements,” EPA said.

Indeed, fuel economy improved 1.2 mpg in 2012 over 2011, reports the EPA’s Fuel Economy Trends Report. Average CO2 emissions are down 22 grams per mile. And compared to 2008, there are now twice as many SUVs achieving at least 25 mpg combined, and seven times as many cars reaching 40 mpg or better.

So what’s not to like? According to Dan Becker of the Washington-based Safe Climate Campaign, long a thorn in automakers’ sides over fuel economy and climate issues, the car companies achieved “technical” compliance, but all but one would have become lawbreakers were it not for loopholes they demanded—and got—during negotiations that ended with a we’re-in-this-together agreement.

Americans still have a taste for gas guzzlers, like these exotic beauties snapped at the New York Auto Show. (Jim Motavalli photo) The EPA calls these loopholes “flexibilities” and claims they “allow greater emissions reductions, lower compliance costs and more consumer choice.” You can read the latter to mean they allow automakers to keep building big gas-guzzling SUVs without violating the law. The loopholes give manufacturers emissions credits for switching to an environmentally friendly air-conditioning refrigerant—something automakers would have done anyway—and allow them to cash in banked credits from previous years. 

In a Detroit News op-ed, Becker and co-author James Gerstenzang call this “fantasy efficiency.” The loopholes, they say, “will result in 38 million tons of extra CO2 pollution being spewed into the atmosphere.”    

The good news is that in 2012, the latest year for which data is available, the major automakers were in technical compliance. The bad news is that all but one would have been in violation if not for loopholes the automakers demanded during negotiations over the standards.

The Toyota FCV Concept is a show car, but the company's commercial fuel-cell cars will start making a dent in fleet fuel economy around 2015. (Jim Motavalli photo)There’s more. Reports the Safe Climate Campaign, “Automakers demanded to be allowed to make more gas guzzlers if they also manufactured vehicles that are capable of running on E-85 ethanol--even if those cars and trucks never use a drop.” The credits, the group said, “act like get-out-of-jail-free cards, letting automakers spew out an extra 38 million metric tons of carbon dioxide. Without them, only Honda would have met the mileage standard for 2012.”

SCC also found that Nissan, Chrysler, Ford and GM “would have each missed the standard by a wide margin” without the extra credit. And both Chrysler and VW “are driving on thin ice” because their banked credits are running out and their current fleets aren’t in compliance without that help. Also, Toyota would get failing grades for trucks, but it’s doing well with cars.

The Cadillac ELR: A sleeper fuel sipper in a gas-hungry line. (Jim Motavalli photo)Lest this sound too dire, the good news probably outweighs the bad. Without tougher EPA Corporate Average Fuel Economy (CAFE) standards, automakers would have had little incentive to make cleaner, more fuel-efficient cars. As it is, they’re bending over backwards with new engine technologies, light-weighting, plus high-tech hybrid and electric cars to reach the government’s brass ring.

As it is, the standards in place between 2012 and 2025 are expected to cut U.S. greenhouse gas by six billion metric tons, more than the entire country’s emissions in 2012. If the Obama administration has done anything else that achieves better results, I’d like to see the numbers.

The Consumer Federation of America reports that, for the first time ever, 50 percent of current models top 23 mpg combined. Five years ago, only 19 percent reached that goal. Today, 11.6 percent of new cars get 30 mpg or better, up from 1.3 percent back then. Fuel economy barely moved between 2002 and 2008. It finally showed improvement in 2010, because automakers knew a 35.5 mpg standard for 2016 was coming.

“The automotive industry’s shift away from gas guzzlers in the past five years has been stunning,” said Mark Cooper, CFA’s research director. “Automakers are well on the road to meeting the 2025 standard of 54.5 mpg.”

Fuel economy can come in sporty packages, as with these fuel-efficient Miatas (now enjoying their 25th anniversary). (Jim Motavalli photo)CFA looked at the 25 top-selling models for 2014 and found that all had at least one offering that meets the 2014 CAFE standard. “Manufacturers are meeting the standards with popular vehicles, and consumers are buying them,” said Jack Gillis, CFA’s public affairs director.

The bottom line is that federal fuel economy standards are working. And, yes, they’ll work better without silly loopholes that just postpone an inevitable shift away from gas-guzzling fleets. On to 54.5.

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