Growth Energy Calls New CAFE Standards A Missed Opportunity

June 11, 2024

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by Erin Voegele (Ethanol Producer Magazine) The U.S. Department of Transportation’s National Highway Traffic Safety Administration on June 7 issued a final rule setting new corporate average fuel economy (CAFE) standards. Growth Energy said the agency has again missed the opportunity to recognize the importance of high-octane, low-carbon ethanol.

The NHTSA’s rule increases fuel economy for passenger cars by 2% per year for model years 2027-2031 and for light trucks by 2% for year for model years 2019-2031. The agency said these increases will bring the average light-duty vehicle fuel economy up to approximately 50.4 miles per gallon by model year 2031. The improved fuel economy is expected to save owners of passenger cars and light trucks more than $600 in fuel over the lifetime of their vehicles.

The rule increases the fuel efficiency of heavy-duty pickup trucks and vans by 10% per year for model years 2030-2032, and 8% per year for model years 2033-2035. The increased fuel efficiency is expected to result in a fleetwide average of approximately 35 miles per gallon by model year 2035, saving owners of heavy-duty pickups and vans more than $700 in fuel over the lifetime of their vehicles.

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The final rule does not address the potential of high-octane, low-carbon ethanol or other biofuels as a way to improve fuel economy. Within the rule, however, the NHTSA does respond to a variety of comments it received from members of the biofuels industry during the rulemaking’s public comment period.

The NHTSA said it received comments from representatives of ethanol and biofuel producers that objected to the agency’s handing of battery electric vehicles (BEVs). The commenters raised energy security concerns related to reduced demand for and reliance on U.S.-produced alternative fuels and increased reliance on foreign supply chains. Commenters also stated the NHTSA failed to consider other fuels like ethanol and biofuels as a way to improve fuel economy in its analysis as part of a holistic approach to reducing U.S. gasoline consumption, failed to consider Renewable Fuel Standard regulations, and recommended the agency consider high-octane renewable fuels as a way to improve fuel economy or conventional internal combustion engines (ICEs).

In its response to these comments, the NHTSA addressed concerns over its treatment of BEVs and noted that its analyses account for the U.S. EPA’s approval of E15 in all model year 2001 and newer gasoline vehicles produced for the U.S. markets. The agency also said it considers flexible fuel vehicles (FFVs) that exist in the reference baseline fleet in its analysis, but notes that FFVs are also subject to restrictions in U.S. law that require the agency to consider dual fueled automobiles to be operated only on gasoline or diesel fuel in setting CAFE standards.

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The NHTSA also responded to comments regarding the of fuel efficiency benefits of high-octane, low-carbon ethanol, particularly when used with high compression ratio (HCR) technology. “While we agree that a higher-octane fuel can work to improve engine fuel efficiency, we do not include it in our analysis,” the agency wrote within the role. “Our engine maps were developed with the use of 87 octane Tier 3 fuel, which represents the most commonly available fuel used by consumers. As we have stated previously, regulation of fuels is outside the scope of NHTSA’s authority. Accordingly, we made no updates to the fuel assumed used in the engine map models.”

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A full copy of the final rule is available on the DOT’s website. READ MORE

Related articles

Corporate Average Fuel Economy Standards for Passenger Cars and Light Trucks for Model Years 2027 and Beyond and Fuel Efficiency Standards for Heavy-Duty Pickup Trucks and Vans for Model Years 2030 and Beyond (National Highway Transportation and Safety Administration)
Growth Energy to NHTSA: Standards Continue to Ignore American Bioethanol (Growth Energy)
Real-world mileage standard for new vehicles rising to 38 mpg in 2031 under new Biden rule (Associated Press)
USDOT Finalizes New Fuel Economy Standards for Model Years 2027-2031 (U.S. Department of Transportation)
Biden is pulling back on an auto rule. Some climate activists aren’t thrilled. (Politico Energy Podcast)
Biden scales back fuel economy standards amid tough political and business realities (Detroit News)
How an obscure energy calculation could dramatically speed up America’s EV future (Detroit News)
Opinion | Why require EVs when we have homegrown corn for ethanol? (Cap Times)
The Enduring American Car: What’s driving the new economy? The old economy’s gas-powered vehicles. (City Journal)

Excerpt from Growth Energy: Growth Energy CEO Emily Skor issued the following statement after the U.S. Department of Transportation’s National Highway Traffic Safety Administration (NHTSA) today issued new vehicle fuel economy standards:

“This is yet another missed opportunity by NHTSA to recognize the importance of high-octane, low-carbon bioethanol blends in meeting the administration’s climate goals. Using high-octane midlevel bioethanol blends in conjunction with future engine technology holds tremendous potential for increasing vehicle efficiency and ultimately reducing greenhouse gas emissions. The carbon intensity of American bioethanol continues to go down, making it more and more useful as a decarbonization tool for on-road applications. Investing in biofuels now will not only decrease carbon emissions from the cars on the road today, but set the stage for greater carbon reductions years from now. The President himself said that ‘you can’t get to net zero without biofuels’ but this final rule will make it harder for American biofuels to live up to their potential.

“Ultimately, as we’ve said before, this proposal unfortunately ignores the potential of bioethanol to help reduce greenhouse gas emissions. We will continue to build the market for American bioethanol and grow the biofuels sector into an even more critical part of America’s low-carbon economy.” READ MORE

Excerpt from Associated Press: New vehicles sold in the U.S. will have to average about 38 miles per gallon of gasoline in 2031 in real-world driving, up from about 29 mpg this year, under new federal rules unveiled Friday by the Biden administration.

The final rule will increase fuel economy by 2% per year for model years 2027 to 2031 for passenger cars, while SUVs and other light trucks will increase by 2% per year for model years 2029 to 2031, according to requirements released by the National Highway Traffic Safety Administration.

The final figures are below a proposal released last year. Administration officials said the less stringent requirements will allow the auto industry flexibility to focus on electric vehicles, adding that higher gas-mileage requirements would have imposed significant costs on consumers without sufficient fuel savings to offset them.

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Even as he promotes EVs, Biden needs cooperation from the auto industry and political support from auto workers, a key political voting bloc, as the Democratic president seeks reelection in November. The United Auto Workers union has endorsed Biden but has said it wants to make sure the transition to electric vehicles does not cause job losses and that the industry pays top wages to workers who build EVs and batteries.

Biden’s likely opponent, former President Donald Trump, and other Republicans have denounced Biden’s push for EVs as unfair for consumers and an example of government overreach.

The new standards will save almost 70 billion gallons of gasoline through 2050, preventing more than 710 million metric tons of carbon dioxide emissions by midcentury, the Biden administration said.

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The highway safety agency said it has sought to line up its regulations so they match new Environmental Protection Agency rules that tighten standards for tailpipe emissions. But if there are discrepancies, automakers likely will have to follow the most stringent regulation.

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Fuel economy figures used by The Associated Press reflect real-world driving conditions that include factors such as wind resistance, hills and use of air-conditioning. Because of those factors, the real-world numbers are lower than mileage figures put forward by NHTSA.

New passenger cars would have to average nearly 49 miles per gallon in 2031 under the new rule, up from about 36.5 miles per gallon this year.

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John Bozzella, president and CEO of the Alliance for Automotive Innovation, a leading industry group, said the Biden administration “appears to have landed on a CAFE rule that works with the other recent federal tailpipe rules.’' Bozzella was using an acronym for the fuel standards, which are officially known as the corporate average fuel economy rules.

Dan Becker at the Center for Biological Diversity, an environmental group, slammed the new rules as inadequate.

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The mileage standards are “a relic of the 1970s,″ Bozzella said, “a policy to promote energy conservation and energy independence by making internal combustion vehicles more efficient. But those vehicles are already very efficient. And EVs don’t combust anything. They don’t even have a tailpipe.″ READ MORE

Excerpt from U.S. Department of Transportation: New standards will save Americans hundreds of dollars at the pump over the lifetime of their vehicles

The U.S. Department of Transportation’s National Highway Traffic Safety Administration today issued new vehicle fuel economy standards that will save Americans more than $23 billion in fuel costs while reducing pollution. This rule is in accordance with continuous energy security efforts that date back to the 1970s, when the average vehicle got about 13 miles to the gallon.

In this final rule, fuel economy will increase 2% per year for model years 2027-2031 for passenger cars, while light trucks will increase 2% per year for model years 2029-2031. These increases will bring the average light-duty vehicle fuel economy up to approximately 50.4 miles per gallon by model year 2031, saving passenger car and light truck owners more than $600 in fuel over the lifetime of their vehicles

Heavy-duty pickup truck and van fuel efficiency will increase 10% per year for model years 2030-2032 and 8% per year for model years 2033-2035. This will result in a fleetwide average of approximately 35 miles per gallon by model year 2035, saving heavy-duty pickup and van owners more than $700 in fuel over the lifetime of their vehicles.

“Not only will these new standards save Americans money at the pump every time they fill up, they will also decrease harmful pollution and make America less reliant on foreign oil,” U.S. Transportation Secretary Pete Buttigieg said. “These standards will save car owners more than $600 in gasoline costs over the lifetime of their vehicle.”

These improved standards will save almost 70 billion gallons of gasoline through 2050, preventing more than 710 million metric tons of carbon dioxide emissions by 2050.

“President Biden’s economic and climate agenda has catalyzed an American clean energy and manufacturing boom,” said President Biden’s National Climate Advisor Ali Zaidi. “From day one, the President has centered America’s workers, and unions that built our middle class, in this transformative agenda, positioning the U.S. auto sector as a leader in the world. The President’s agenda is working. On factory floors across the nation, our autoworkers are making cars and trucks that give American drivers more choices today than ever before. These fuel economy standards, rigorously aligned with our investments and standards across the federal government, deliver on the Biden-Harris Administration’s promise to build on this momentum and continue to spur job creation, and move faster and faster to tackle the climate crisis.”

“When Congress established the Corporate Average Fuel Economy program in the 1970s, the average vehicle got about 13 miles to the gallon. Under these new standards, the average light-duty vehicle will achieve nearly four times that at 50 miles per gallon,” NHTSA Deputy Administrator Sophie Shulman said. “These new fuel economy standards will save our nation billions of dollars, help reduce our dependence on fossil fuels, and make our air cleaner for everyone. Americans will enjoy the benefits of this rule for decades to come.”

The agency engaged with a broad set of stakeholders while crafting the final rule, including consumers, unions, automakers, states, environmental advocates, and others.

NHTSA’s new fuel economy standards complement the Environmental Protection Agency’s emissions standards for similar vehicle fleets. NHTSA worked closely with the EPA to optimize the effectiveness of its standards while minimizing compliance costs, consistent with applicable statutory factors.

The final rule sets increased standards that are consistent with Congress’ direction to conserve fuel and promote American energy independence and American automotive manufacturing, while providing flexibility to industry on how to achieve those targets. Though NHTSA does not consider electric and other alternative fuels when setting standards, manufacturers may use all available technologies – including advanced internal combustion engines, hybrid technologies and electric vehicles – for compliance.

Passenger cars are generally sedans, station wagons, and two-wheel drive crossovers and SUVs, while light trucks are generally four-wheel drive SUVs, pickups, minivans, and passenger/cargo vans. Heavy-duty pickup trucks and vans are generally Class 2b/3 work trucks, fleet SUVs, work vans, and cutaway chassis-cab vehicles.

For more information, please see NHTSA’s Corporate Average Fuel Economy page. READ MORE

Excerpt from Detroit News: The CAFE rule is the last of three major federal rules that will regulate pollution from consumer vehicles.

The other rules, which were similarly scaled back amid industry feedback, came from the Environmental Protection Agency and the Department of Energy. The EPA rule regulates allowable carbon dioxide emissions from vehicle tailpipes, and the Energy Department rule adjusted an important calculation impacting the fuel economy scores for EVs.

Despite issuing a less-stringent final EPA rule, agency administrator Michael A. Regan still called the regulation the "strongest vehicle pollution technology standard ever finalized in United States history" during a news conference in March.

Even with the CAFE rule now finalized, one more decision on vehicle emissions — and perhaps the most important one — remains for Biden.

California is seeking federal approval for even tougher standards beginning in 2026. Their standards, which 11 other states have already committed to copying, would effectively mandate a full shift to electric vehicles in those states. READ MORE

Excerpt from Cap Times: Forcing an all-out shift to electrification would be a mistake, especially when there is an equally strong alternative that doesn’t strain the electric grid or require mass infrastructure development. Today, corn ethanol reduces greenhouse gas emissions by 46% compared to regular gasoline, which is better than many EVs.

If it weren’t for the administration’s rash decision-making, Wisconsin farmers could today provide a solution to the desire for cleaner cars and trucks on the road. It would be downright foolish to completely overlook this sector — it checks all the boxes that the administration is looking for.

Aside from investing trillions of taxpayer dollars toward EV infrastructure and mandated EVs that rely on Chinese resources, there are also additional concerns with EVs in a rural state like Wisconsin.

Charging stations are typically clustered in the urban, more populated areas. That means people living in rural communities must travel greater distances for a recharge. Meanwhile, there is likely a gas station just a mile away in town. Rural residents with passenger cars and heavy-duty trucks, often used for hauling, shouldn’t have to worry about when and where their next recharge will take place.

Living in Wisconsin, we also know the operational capabilities of all batteries take a drastic hit when the weather drops below freezing. These cold temperatures greatly reduce the driving range of EVs, and no one wants to be stuck in the cold with an EV that breaks down on the side of the road.

It would be wrong for me to force an ethanol-powered vehicle upon another consumer — just as it is wrong for the government to force EVs. I respect that EVs are a good choice for some individuals and families, despite the challenges they present. But the government shouldn’t be mandating EVs — which someday may or may not reduce overall emissions — when they have homegrown biofuels that are here now and available at your local filling station. READ MORE

Excerpt from City Journal: Unfortunately for regulators and activists, 98 percent of all cars on the roads today have engines. And despite the hype and subsidies directed at EVs, gas-powered vehicles still account for 97 percent of all annual car purchases. While EVs’ “rapid” rise to a 7 percent share of new car sales has garnered much publicity, the real-world marketplace includes used vehicles that constitute nearly three-fourths of all cars purchased annually. Price matters for most car buyers, and using figures from January 2024, the average used-car price is about $20,000 lower than that of the average new car—and about $28,000 lower than that of the average new EV.

Given the steep price and apparent unpopularity of EVs, policies disfavoring traditional vehicles will create a massive shortage of affordable new gas-powered cars. That will push more buyers into the preowned market, sending used-car prices skyward.

Advocates claim that EVs will soon be as cheap as conventional cars, but supply-chain realities render that wishful thinking. The minerals used to make EV batteries and power systems are far less common than the materials needed to fabricate a conventional car. Indeed, input materials account for more than half the overall cost of an EV’s massive, half-ton battery. If electric-vehicle production rises to the level that environmentalists hope, demand for the needed metals (notably copper) will require hundreds of new mines and refineries, which no country is planning at such scale.

As for the trope that EVs are cheaper to operate, experience reveals otherwise. Earlier this year, for example, Hertz sold off much of its recently purchased EV fleet after discovering those vehicles’ maintenance and operational costs. Survey data reveals individual owners face similar problems. In 2023, Consumer Reports found that electric vehicles were associated with 79 percent more problems than were conventional vehicles. These vehicles also pose higher personal costs in the form of far longer fueling times—critically important to middle-class and lower-income drivers but less relevant for wealthy, multicar households, where the EV is an option, not a necessity. Advocates have also ignored the multitrillion-dollar infrastructure costs needed to make on-road EV fueling possible.

While one might assume that EVs’ operational and reliability features will improve and that prices will moderate over time, such progress comes only with the maturation of the associated industries, which can take many years, even decades. And with 2032 mandates looming, there is less time to achieve such progress than many imagine. The roughly four-year design and retooling cycle times for auto factories means that the type of cars available by the time the bans take effect will be based on decisions made during the next U.S. president’s term.

Progressive policymakers are pursuing pro-EV mandates, despite these headwinds, because they believe that replacing gas-powered cars will radically reduce global carbon dioxide emissions. But the notion that EVs are “zero-emissions” is untrue, even fatuous. Set aside the obvious fact that hydrocarbons, which necessarily emit carbon dioxide when burned, are essential for electricity production on grids nearly everywhere and will be for decades. The “hidden elephant” for emissions comes from the massive upstream use of hydrocarbons to mine and produce the materials needed to build EVs in the first place. Those emissions, even if happening elsewhere, can be significant enough to nullify many of the downstream reductions from avoiding conventional-car use. More importantly, any gains made from America’s adopting EVs will be wiped out by continually rising and far greater emissions from economic expansion in China, India, Indonesia, and Africa.

It’s no coincidence that the benefits of the still-expanding digital economy are colliding with the energy realities of the old economy. Ironically, the energy-hungry cloud is enabling a booming gig economy, which in turn fuels demand for the old economy’s favorite mobility technology—a low-cost, high-convenience car with a high-performance internal combustion engine. For years, Silicon Valley investors have been touting a tech-driven “mobility revolution.” Well, we’ve got one.

The name of the person who first used the term “gig” for cloud-and-car-enabled work is lost to history. The slang term itself traces its origins to jazz musicians from the Roaring Twenties, a century ago. Whether our 2020s will roar, too, depends on whether we have enough cheap old-economy grid energy to power the cloud—and enough old-economy automobiles to propel an even bigger gig economy. READ MORE