The U.S Environmental Protection Agency (EPA) and the Department of Transportation’s National Highway Traffic Safety Administration (NHTSA) issued final rules extending the National Program to further reduce greenhouse gas (GHG) emissions and improve fuel economy for model years(MYs) 2017 through 2025 light trucks and cars. EPA is establishing national GHG emissions standards under the Clean Air Act, and NHTSA is establishing Corporate Average Fuel Economy (CAFÉ) standards under the Energy Policy and Conservation Act, as amended by the Energy Independence and Security Act (EISA).

EPA’s standards apply to passenger cars, light-duty tracks, and medium-duty passenger vehicles in MYs 2017 through 2025. The final standards are projected to result in an average industry fleet wide level of 163grams/mile of carbon dioxide (CO₂) in model year 2025, which is equivalent to 54.5 miles per gallon (mpg) if achieved exclusively through fuel economy improvements. Light-duty vehicles are currently responsible for nearly 60 percent of U.S transportation-related petroleum use and GHG emissions.

EPA’S Greenhouse Gas Standards

EPA is finalizing a set of fleet-wide carbon dioxide (CO₂) emission standards for cars and light trucks. These standards are based on CO₂ emission footprint curves, where each vehicle has a different CO₂ emission compliance target depending on its footprint value (related to the size of the vehicle). Generally, the larger the vehicle footprint, the higher the corresponding vehicle CO₂ emissions target. As a result, the burden of compliance is distributed across all vehicles and all manufacturers. Manufacturers are not compelled to build vehicles of any particular size or type and no single vehicle is required to meet its individual target. Each manufacturer will have its own fleet-wide standard that reflects the vehicles it chooses to produce, and the GHG program provides a wide range of credit programs and flexibilities for manufacturers to meet the standards (United States Environmental Protection Agency, 2012).

Vehicle technologies to reduce GHGs and Improve Fuel Economy

EPA projects that manufacturers will comply with the MYs 2017-2025 standards by using a vehicle range of technologies, including continual advances with gasoline engines and transmissions, vehicle weight reduction, lower tire rolling resistance, vehicle aerodynamics, diesel engines, and more efficient vehicle accessories. EPA expects that the majority of improvements will come from advancements in internal and combustion engines, although there is a likelihood of increased electrification of the fleet through expanded production of stop/start, hybrid vehicles, plug-in hybrid electric vehicles, and electric vehicles. EPA also expects that vehicle air conditioning systems will continue to become more efficient, reduce leakage, and use alternative refrigerants with lower hydroflourocarbon emissions (Regulatory Announcement, 2012).


In Europe, The Regulation (EU) 2019/1242 sets the CO₂ emission standards for heavy-duty vehicles. The Regulation entered into force on 14th August 2019. The regulation was implemented to achieve greenhouse gas emissions by 30% by 2030, to achieve the Paris Agreement objectives, to set out new performance requirements for heavy-duty vehicles by reducing the amount of CO₂ emissions. According to article 2, the regulation applies to N₂ and N₃ heavy-duty vehicles that have the following characteristics: tractors with an axle configuration of 6×2, rigid lorries with an axle configuration of 6×2, tractors with an axle configuration of 4×2, a technically permissible maximum laden mass exceeding 16 tonnes; and rigid lorries with an axle configuration of 4×2 and a technically permissible maximum laden mass exceeding 16 tonnes.

Article 4 of the Regulation(EU) states that starting from 1 July 2020, the commission shall determine the average specific emissions for manufacturers in g/tkm by taking into account the zero- and low-emission factor and the data reported pursuant to Regulation(EU) 2018/956 for the manufacturer’s new heavy-duty vehicles registered in the preceding reporting period, excluding vocational vehicles. Article 5 states that as from 1 July 2020, the Commission shall determine for each manufacturer the zero- and low-emission factor for the preceding reporting period. The zero- and low-emission factor shall take into account the number and the CO₂ emissions of zero- and low-emission heavy-duty vehicles in the manufacturer’s fleet in a reporting period, including zero-emission heavy-duty vehicles as well as zero- and low-emission vocational vehicles.

Article 6 states that as from July 1 2026 and in the subsequent reporting period, the commission shall determine for each manufacturer a specific CO₂ emissions target shall be the sum over all vehicle sub-groups, of the products of the following values: the reference CO₂ emissions; the manufacturer’s share of vehicles in each vehicle sub-group; the annual mileage and payload weighting factors applied to each vehicle sub-group.

Article 8 sets the emissions targets that are compliant with the specific CO₂ targets. Article 8(2) states the limits of CO₂ emissions:

  1. Where in any of the reporting periods of the years 2025 to 2028, the sum of the emission debts reduced by the sum of the emission credits exceeds the emission debt of 5%
  2. Where, in the reporting period of the year 2029, the sum of the emission debts reduced by the sum of the emission credits is positive
  3. Where, from the reporting period of the year 2030 onwards, the manufacturer’s average specific CO₂ emissions exceed its specific CO₂ emission target

Article 8(1) of the EU regulation sets the premiums that will be imposed should the CO₂ be in excess:

  1. From 2025 to 2029

(Excess CO₂ emissions premium) = (Excess CO₂ emissions x 4 250 EUR/gCO₂/tkm)

  • From 2030 onwards

(Excess CO₂ emissions premium = (Excess CO₂ emissions x 6 800/EUR/gCO₂/ tkm).

In conclusion, the excess CO₂ emissions premiums shall be considered as revenue for the general budget of the European Union.


 Asia has modelled its vehicle emission standards after the European Standard. Asia’s current nationwide emissions standard is the Euro IV (4). Asia intends to implement Asia 5 standard for LDVs in 2018 while the implementation of HDVs has yet to be determined. Asia is encouraging the purchase of hybrid and electric cars to reduce vehicle emissions. In Asia, fuel tax is an alternative policy i.e. the larger the engine and fuel requirement, the higher the amount of tax one is required to pay. This will help reduce fuel consumption hence reducing emission of gases into the environment (Owen and Tao 2015, 9).


Owen D. and Tao J. (2015), International Best Practices For Emissions and Fuel Standards: Implementation Possibilities for Asean, Energy Studies Institute, National University of Singapore, Volume 2, No. 1/2015

Regulatory Announcement 2012

The Regulation (EU) 2019/1242

United States Environmental Protection Agency 2012

At Legal writing experts, we would be happy to assist in preparing any legal document you need. We are international lawyers and attorneys with significant experience in legal drafting, Commercial-Corporate practice and consulting. In the last few years, we have successfully undertaken similar assignments for clients from different jurisdictions. If given this opportunity, The LegalPen will be able to prepare the legal document within the shortest time possible. You can send us your quick enquiry ( here )