crs_reports: R49361

Congressional Research Service reports with summaries, authors, and topic classifications.

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R49361 Corporate Average Fuel Economy (CAFE) Standards 2026-09-24T04:00:00Z 2026-09-26T05:55:04Z Active Reports Naseeb A. Souweidane   The National Highway Traffic Safety Administration (NHTSA) administers Corporate Average Fuel Economy (CAFE) standards that regulate the fuel consumption of vehicles. These standards require automotive manufacturers to produce vehicles with greater fuel-efficiency with the stated goal to reduce energy consumption and limit dependence on foreign oil. Title 49, Section 32902, of the U.S. Code sets several statutory obligations for CAFE standards, including a mandate to set the maximum feasible standards for each model year and considerations to be used in making that determination. The stringency of CAFE standards has generally increased since their implementation in 1978. NHTSA sets separate CAFE standards each model year for light-, medium-, and heavy-duty vehicles. Light-duty vehicles are separated into three fleet or compliance categories: (1) domestic passenger vehicles, (2) imported passenger vehicles, and (3) light trucks. Manufacturers are required to meet CAFE standards for each fleet in which they produce vehicles. NHTSA expresses CAFE standards through a mathematical function represented as a curve. The CAFE curve sets a range for vehicles in a given fleet each model year, and the specific standards are dependent on footprint, a vehicle attribute that is a measurement of vehicle size. NHTSA and the Environmental Protection Agency (EPA) both have roles in the enforcement of CAFE standards. EPA verifies automotive manufacturers’ CAFE data, conducts tests to measure the fuel economy and emissions of vehicles, calculates manufacturers’ CAFE values, determines the average CAFE values, and issues final CAFE reports to manufacturers and NHTSA. NHTSA then identifies whether the fleet performance is greater than or equal to the standards set for a manufacturer’s fleet. Additionally, manufacturers are required to label certain fuel economy information on vehicles, and EPA and NHTSA coordinate to administer the labeling requirements. NHTSA offers several flexibilities for manufacturers to comply with CAFE standards. These flexibilities include credits from overcompliance with CAFE standards, fuel consumption improvement values (FCIVs), and incentives and limitations in calculations for alternative fuels. Credits for overcompliance with standards can be (with some limitations) applied to previous or future model years, transferred to another fleet owned by a manufacturer, or traded among manufacturers. The CAFE program also allows manufacturers to boost their compliance through FCIVs derived from certain air conditioning and off-cycle technologies. Alternative fuel vehicles include electric, ethanol, biodiesel, and natural gas vehicles are incorporated into CAFE standards through calculations with certain incentives and limitations. NHTSA generally administers the CAFE program, and Congress may reevaluate the program and agency authorities. Members of Congress might choose to introduce bills that would redefine vehicle fleet classifications or alter what the Secretary of Transportation must consider when determining the maximum feasible average fuel economy. Additionally, the stringency of these standards has changed over time, and Congress may further adjust them. Congress may explore aspects of the CAFE program’s compliance and enforcement. For example, Congress may consider EPA’s involvement in the enforcement of the program. In addition, the civil penalty associated with the CAFE program is NHTSA’s primary mechanism for enforcing CAFE standards, and it is currently set at $0.00. Due to this reduction to $0.00, many aspects of these CAFE standards may no longer be as applicable as before since manufacturers are no longer incentivized to comply with these standards. Congress may choose to reset the civil penalty amount. If Congress does not reset the civil penalty, Congress may choose to still engage in activities related to CAFE standards if Members anticipate future changes to the civil penalty or wish to continue to oversee aspects of the CAFE program, such as monitoring fuel efficiency of vehicle fleets and maintaining vehicle fuel economy labeling. Congress may reevaluate the flexibilities that NHTSA offers manufacturers to comply with CAFE standards. Credits that manufacturers receive for overcompliance with their CAFE program obligations may be altered by legislation, such as through provisions that would set limitations on banking or trading credits. Congress could also reevaluate NHTSA and EPA’s considerations of FCIVs. Congress has modified the incentives for alternative fuel vehicles through several laws and could choose to further modify incentives through new legislation. Congress may choose to amend NHTSA’s statutory limitations on the consideration of certain alternative fuel vehicles when setting CAFE standards. Congress could also choose to make no changes to the CAFE program and allow relevant agencies to determine various aspects of the program. https://www.congress.gov/crs_external_products/R/PDF/R49361/R49361.1.pdf https://www.congress.gov/crs_external_products/R/HTML/R49361.html

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