US rolls back fuel economy standard to 1.5% annual target, from 5%

The Trump administration Tuesday issued final fuel economy targets for 2021-26 model-year light-duty vehicles, rolling back the existing targets to an annual efficiency increase of 1.5% from 5%.

Easing the requirements on automakers would increase US oil demand by 500,000 b/d, according to estimates by the Environmental Protection Agency and National Highway Traffic Safety Administration.

The analysis was done before global oil prices and US gasoline demand plummeted as a result of the coronavirus pandemic.

The regulatory rollback has been in the works since 2018 and remains the subject of legal challenges by states and environmental groups fighting to keep the Obama-era standards.

The US auto fleet is projected to have an average fuel economy of 40.4 miles per gallon in 2021-26, compared with 46.7 mpg under the previous standards adopted in 2012, EPA and NHTSA said.

"This rule is the largest deregulatory initiative of this administration," the agencies said in a statement.