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What are CAFE Standards?

By B. Schreiber
Updated May 17, 2024
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In the United States, CAFE standards are a set of regulations that govern fuel efficiency for vehicles in the categories of cars and light trucks. CAFE stands for corporate average fuel economy, and requires manufacturers to meet efficiency averages for their fleet of such automobiles. CAFE standards are set by the the National Highway Traffic Safety Administration (NHTSA). The regulations were first intended to decrease the nation's need for oil, much of which is imported from foreign countries. They have also become a way to reduce pollution and curb emissions of greenhouse gases, especially carbon dioxide.

The first CAFE standards mandated that manufacturers achieve a fleet-wide average of 18 milers per gallon (mpg). This had increased to 27.5 mpg by 1990 and remained unchanged until 2010. In 2010, the Environmental Protection Agency (EPA) and the NHTSA announced new standards that would reach a fleet-wide average of about 34 mpg by 2016. In that year, cars would be required to achieve about 39 mpg and light trucks about 29 mpg. Credits for vehicles that run on ethanol, as well as electric and hybrid vehicles, were also announced.

The standards are based on each car maker's fleet, or all car and light truck models combined, and are also weighted by sales. The EPA either tests the fuel economy of vehicles itself or receives results from manufacturers. The goals can be met in different fashions because of the weighted sales and various credits. While a company's average fuel economy may not meet the averages for its fleet, it can still meet the standards by selling a high volume of its most efficient models. Fines are assessed to car makers that do not meet CAFE standards.

CAFE standards first went into effect in 1975 as part of the Energy Conservation Act. Critics have pointed out that advances in fuel economy have been slower than originally intended. In 2010, the EPA and NHTSA announced that the regulation of carbon dioxide and other greenhouses gases would be included in future versions.

In the United States, CAFE standards are often a political issue that appear regularly in campaign seasons. They are also a topic of discussion in response to spikes in the price of oil and gas. The decision to regulate greenhouse gases was due less to voter concern than the Supreme Court case Massachusetts vs. EPA. This case forced the EPA to regulate greenhouse gases under the Clean Air Act.

America Explained is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
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