US environmental regulation policies for vehicles

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In an effort to conserve national energy and to improve automobile efficiency, Congress enacted laws that help motivate vehicle manufacturers to invest in research and manufacturing of vehicles with higher fuel economy and better efficiency.

This list was compiled to gain a better understanding of U.S. policies on vehicle regulations and the effect they have on manufacturers and consumers. We wish to use this information in our optimization model, combining influence of policy with engineering goals and market demands and.

This is not exhausted list but it will be updated further ASAP.


US Federal Policies

US government's energy policies and environmental regulations related to light-duty vehicles.

Year Bill Title Descriptions
2009 American Recovery and Reinvestment Act of 2009 (ARRA)<ref>American Recovery and Reinvestment Act of 2009.</ref>
  1. Modified tax credits for alt. fuel infrastructure and plug-in hybrids.
  2. Expand funding to states and local for speeding up fleet turnover; i.e. replace old Diesel engine with new cleaner ones.
  3. Add grants for R&D of advanced vehicle batteries and system components.
2008 Emergency Economic Stabilization Act of 2008 (EESA)<ref>Emergency Economic Stabilization Act of 2008. </ref>
  1. Modified and extended key tax credits for biofuels and other alternative fuels.
  2. Established a tax credit for the purchase of plug-in hybrids.
2008 Food, Conservation, and Energy Act of 2008 (the 2008 Farm Bill)<ref>Food, Conservation, and Energy Act of 2008.</ref>
  1. Expended the biofuel programs initiated by the 2002 Farm Bill.
  2. Reduced the tax credits for ethanol produced from corn and other conventional feedstocks (starting in 2009).
  3. Established credits for biofuels produced from cellulosic matter, e.g. trees and perennial grasses.
2007 Energy Independence and Security Act of 2007 (EISA)<ref>Energy Independence and Security Act of 2007.</ref><ref>Energy Independence and Security Act of 2007: A Summary of Major Provisions. CRS Report RL34294.</ref>
  1. Tightened federal CAFE standards and targeted a combined fuel economy of passenger cars and light trucks at 35 mpg in 2020.
  2. Set new renewable fuels target at 9.0 billion gallons in 2008
  3. Set new renewable fuels target at 36 billion gallons in 2022. EISA also mandated the use of 21 billion gallons of advanced biofuels.
2005 Energy Policy Act of 2005 (EPAct 2005) <ref>Energy Policy Act of 2005. </ref>
  1. Increased biofuel consumption to 4, 6.1 and 7.5 billion gallons by 2006, 2009 and 2012, respectively.
  1. Requires the purchase of AFV in governmental fleet.
  2. State governments, and alternative fuel providers
1975 Energy Policy and Conservation Act of 1975 (EPCA)<ref>Title 42, Chapter 77 - Energy Conservation Act.</ref>
  1. Established fuel economy standards (CAFE) for passenger cars and light trucks.

Alternative Fuel Tax Incentives

Currently there are several tax incentives for alternative fuels<ref>Brent D. Yacobucci, Alternative Fuels and Advanced Technology Vehicles: Issues in Congress. February 13, 2009</ref>:

  • Tax credit for conventional ethanol: $0.45 per gallon (2009). (was $0.51 in 2008)
  • Tax credit for biodiesel and renewable diesel: $1.00 per gallon
  • Tax credit for other alternative fuels, e.g. LPG: $0.50 per gallon
  • Tax credits for small ethanol and biodiesel producers: $.10 per gallon
  • Tax credits for production of cellulosic biofuels:up to $1.01 per gallon

Summary of Alternative Fuel and Advanced Technology Vehicle Tax Incentives Under the Energy Policy Act of 2005 Tax Incentive Type<ref>Yacobucci, Brent D. 2005. Tax Incentives for Alternative Fuel and Advanced Technology Vehicles. CRS Report RS22351. </ref>

Tax Incentive Type Maximum Credits Expiration Date
Hybrid vehicle $3,400 Dec. 31, 2009
Lean-burn vehicle $3,400 Dec. 31, 2010
Fuel-cell vehicle $12,000 Dec. 31, 2014
Alternative fuel vehicle $4,000 Dec. 31, 2010
Residential refueling infrastructure $1,000 Dec. 31, 2009
Retail refueling infrastructure $30,000 Dec. 31, 2009

American Recovery and Reinvestment Act of 2009

Alternative Fuel and Advanced Vehicle Technology Provisions<ref>American Recovery and Reinvestment Act of 2009,</ref>:

Topic Division Policy details Page
Advanced battery manufacturing Department of Energy $2 billion grants for the manufacturing of advanced batteries and components in the US, including advanced lithium ion batteries, hybrid electrical systems, component manufacturers, and software designers. page 24
Advanced technology vehicles manufacturing Department of Energy $10 millions for administrative expenses for the Advanced Technology Vehicles Manufacturing Loan Program. page 26
Energy-efficient federal motor vehicle fleet procurement Department of Energy $300 millions for acquiring motor vehicles with higher fuel economy, including: hybrid vehicles; electric vehicles; and commercially-available, plug-in hybrid vehicles page 36
Diesel emission reductions Environmental Protection Agency $300 million for the diesel emission reduction plan initiated by the Energy Policy Act of 2005 Page 56
Temporary increase in tax credit for alternative fuel refueling property Tax Provisions For 2009 and 2010, increase credit for retail installations to 50% and maximum credit to $50,000; increases residential credit to $2,000; for hydrogen retail infrastructure, maintains 30% credit but increases maximum to $200,000 Page 211
Tax credit for plug-in hybrids Tax Provisions Light-duty vehicles: Vehicle base amount is $2,500 for a PHEV can draw propulsion energy from a battery with not less than 5 kWh of capacity (base $417), plus $417 for each kWh of capacity in excess of 5 kilowatt hours. Total amount for battery shall not exceed $5,000. Thus the tax credit can be calculated by min(7500,2500 + 417 + 417 * (kWh − 5)). Low-speed PHEV: up to $2,500 (battery must >4 kWh for 4 wheels; >2.5 kWh for 2 or 3 wheels). PHEV conversion kits: up to $4,000 for conversion. Allow plug-in credits against Alternative Minimum Tax (AMT) Page 212-219

Emission Standards

Emission Standards

Corporate Average Fuel Economy (CAFE)

Corporate Average Fuel Economy (CAFE) is the required average fuel economy for a vehicle manufacturer's passenger cars and light trucks with gross vehicle weight rating (GVWR) of at most 8,500 lbs each year.

Gas Guzzler Tax

Energy Tax Act of 1978 imposed set gas guzzler tax penalties on car manufacturers who fail to meet the minimum fuel economy level of 22.5 mpg. This does not include minivans, sport utility vehicles or pick-up trucks. It is intended to discourage the production and purchase of fuel inefficient vehicles.



External Links

  1. EPA’s Fuel Economy and Emissions Programs
  2. NHSTA CAFE Overview
  3. U.S. Department of Energy - State & Federal Incentives & Laws
  4. Frequently Asked Questions
  5. Emission Standard Wikipedia
  6. Green Car Congress
  7. Google news - Senators offer new CAFE plan June, 21, 2007
  8. Canada will regulate vehicle fuel economy
  9. Canada Introduces Measures to Encourage Fuel-Efficient Vehicle Purchases
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