US and Canada launch vehicle emission crackdown

As widely expected, the US last week finalised new vehicle fuel efficiency standards designed to help slash carbon emissions, mirroring similar rules launched at the same time by the Canadian government.

The controversial rules were formally adopted on Thursday by the US Environmental Protection Agency (EPA), which will now enforce the new legislation.

"By working together with industry and capitalising on our capacity for innovation, we've developed a clean cars program that is a win for automakers and drivers, a win for innovators and entrepreneurs, and a win for our planet," said Lisa Jackson, the administrator of the EPA.

The legislation will come into effect for vehicles with a 2012 model year and will significantly strengthen existing fuel economy standards, requiring auto manufacturers to increase the average fuel efficiency of cars and trucks to 35.5 miles per gallon by 2016, up from the current limit of just under 25 miles per gallon.

The EPA also ruled average vehicle emissions must fall by around 15 per cent to 250 grams of carbon dioxide per mile by 2016.

Meanwhile, Canada's government last week finalised fuel efficiency rules that Canadian environment minister Jim Prentice said would mean that Canada and the US "will effectively share common standards".

He added that additional rules covering emissions from larger trucks would be unveiled within the next few months.

According to figures from the EPA, the new rules will add around $52bn to the cost of vehicle manufacture, but will result in economic benefits of $240bn through reduced fuel and health costs, while slashing greenhouse gas emissions by 900 million metric tons.

And in a move that could deliver a significant boost to the emerging market for plug-in electric vehicles, a US government official told news agency Reuters that such vehicles would initially be rated as having "zero" emissions under the new rules, providing manufacturers with a further incentive to invest in producing electric cars.

The new rules, which have been imposed under the Clean Air Act, are being challenged in the courts by a raft of business groups and legislators who have argued the EPA does not have the authority to regulate greenhouse gas emissions.

However, Jackson has repeatedly held up the ability to impose national standards on vehicles as one of the main reasons for the EPA to retain its power to regulate carbon emissions, on the grounds that the US car industry has supported a move that has ensured it no longer faces the prospect of a patchwork of different state vehicle emission standards.