US to finalise sharply lower vehicle fuel economy standards

The U.S. Transportation Department is set to finalize significantly lower vehicle fuel economy standards through 2031, reversing the Biden administration's efforts to encourage automakers to produce more electric vehicles, according to officials. President Donald Trump approved the new fuel economy standards for cars and trucks, claiming they will reduce the price of new vehicles.

This decision, anticipated to take effect on Monday, is hailed as a major win for American auto workers, according to Transportation Secretary Sean Duffy.

The new standards are projected to reduce vehicle costs by approximately $930 each, according to the department's estimates. However, they will also increase fuel consumption by around 378.41 litres through 2050, raise fuel spending by $185 billion, and lead to a five percent increase in carbon dioxide emissions, the department said. This move by Trump aims to facilitate the sale of less efficient vehicles to consumers.

Critics, such as former Transportation Department head Pete Buttigieg, argue that the decision will accelerate the transition of the clean tech future to China and force Americans to pay more at the pump. The new standards, set at an average of 14.7 km per litre by 2031, are a stark contrast to the 21.4 km per litre required under the Biden administration.

The Trump administration's proposal adjusts the 2022 model year fuel economy standard retroactively and then increases it between 0.25 percent and 0.5 percent annually through 2031.