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Findings Recommendations
  • The CAFE program has contributed to increased fuel economy of the nation’s light-duty vehicle fleet during the past 22 years.
  • The CAFE system, or any alternative regulatory system, should include broad trading of fuel economy “credits.
  • Certain aspects of the CAFE program have not functioned as intended:
    • The car/truck distinction has been stretched beyond the original purpose.
    • No evidence that the "2-fleet rule" distinguishing between domestic and foreign has had any perceptible effect on total employment in the U.S. automotive industry.
  • Consideration should be given to designing and evaluating an approach with fuel economy targets that are dependent on vehicle attributes, such as vehicle weight, that influence fuel use
  • Technologies exist that, if applied to the light-duty fleet (passenger cars and light-trucks), would significantly reduce fuel consumption within 15 years.
  • Under any system of fuel economy targets, the “2-fleet rule” for domestic and foreign content should be eliminated.


  • Report to Congress on “Effects of the Alternative Motor Fuels Act CAFE Incentives Policy

    This document provides an overview of the Corporate Average Fuel Economy (CAFE) incentives policy to encourage the production of alternative fuel vehicles (AFVs) and the impact it has had on the availability of AFVs, petroleum use and greenhouse gas emissions in the United States. The report was prepared in consultation with the Department of Energy and the Environmental Protection Agency.

    Summary Highlights follow:

    • The Alternative Motor Fuels Act of 1988 (AMFA, Pub. L. 100 94, October 14, 1988) provides CAFE incentives for the manufacture of vehicles that use ethanol, methanol, or natural gas fuels, either exclusively or as an alternate fuel in conjunction with gasoline or diesel fuel. The primary purpose of AMFA is to encourage the widespread use of these fuels and to promote the production of alternative fuel vehicles by manufacturers.

    • Manufacturers producing alternative fuel vehicles that meet specific energy efficiency and minimum driving range requirements are able to gain CAFE credits by manufacturing these vehicles. This helps manufacturers raise their overall fleet fuel economy levels in their efforts to comply with the CAFE standards. The maximum allowable increase in CAFE from MY 1993 B 2004 is 1.2 mpg per manufacturer.

    • The AMFA CAFE credit program has been successful in stimulating a significant increase in the availability of alternative fuel vehicles (mostly ethanol E85 flexible-fuel vehicles). Because manufacturers had to overcome technological challenges, nearly the entire increase has been in the past three years.