Sport Utility Vehicles, Mini-Vans, and Light Trucks: An Overview of Fuel Economy and Emissions Standards

Order Code RS20298

Updated December 17, 2004

CRS Report for Congress

Received through the CRS Web

Sport Utility Vehicles, Mini-Vans,

and Light Trucks: An Overview of

Fuel Economy and Emissions Standards

Brent D. Yacobucci

Specialist in Energy Policy

Resources, Science, and Industry Division

Summary

Most sport utility vehicles, mini-vans, and pickups are classified as “light trucks”

and thus are regulated less stringently than passenger cars under two major laws — the

Energy Policy and Conservation Act for fuel economy standards, and the Clean Air Act

for emissions standards. These differences came about because at the time the laws

were passed, light trucks were used differently, and because they represented a much

smaller share of the automobile market. Over the past decade, however, these vehicles

have dramatically increased their share of the new automobile market. Therefore, the

share of total fuel consumption and emissions attributable to these vehicles has steadily

increased. In response to this trend, the Environmental Protection Agency has ruled that

by model year 2009, emissions from all light trucks and passenger cars will be regulated

equally. Also, in April 2003, the Department of Transportation finalized more stringent

fuel economy standards for light trucks starting in MY2005. This report discusses the

discrepancy between emissions and fuel economy standards for passenger cars and light

trucks, how that discrepancy is changing, and legislative activity related to these issues.

This report will be updated as events warrant.

Introduction

Sport utility vehicles and other light trucks are regulated through two laws that affect

their fuel use and emissions: the Energy Policy and Conservation Act of 1975 (EPCA)1

and the Clean Air Act (CAA).2 EPCA first set fuel economy standards for the 1977

model year (MY1977). Since then, all light trucks — including most sport utility vehicles

(SUVs) and all mini-vans — have been held to less stringent fuel economy standards than

passenger cars. Furthermore, since MY1975, most light trucks have faced less stringent

emissions standards under Clean Air Act regulations. The differences in standards

1

P. L. 94-163, Section 301; 49 U.S.C. 32902.

2

42 U.S.C. 7521.

Congressional Research Service ˜ The Library of Congress

CRS-2

reflected the situation prevalent at the time these laws were enacted: first, light trucks

were mainly used as commercial and agricultural work vehicles;3 second, they were a

relatively small portion of the U.S. automobile market.

Since then, conditions have changed significantly. Today, light trucks are a larger

portion of the total vehicle population, and travel more annual vehicle miles. For

example, in 1980, light trucks composed 19.9% of the U.S. new automobile market.4 By

2001, this figure had increased to 50.8%; SUVs alone accounted for 23.1% of the new

vehicle market in 1999, while mini-vans accounted for 5.8%.5 However, a comparison

of market share underestimates this growth and its consequences. While the number of

passenger cars sold each year in the United States has decreased somewhat since 1980,

the number of light trucks sold has more than tripled, from 2.2 million in 1980 to 8.7

million in 2001. In 2001, SUV sales alone (4.0 million) nearly doubled total light truck

sales for 1980. As a result, the total fuel usage and emissions attributable to these

vehicles has increased.

Because of the increased emissions and consumption from light trucks, the

Environmental Protection Agency (EPA) has ruled that by MY2009, all light vehicles

(including all passenger cars and SUVs, and most vans and pickups — all but the very

largest vehicles) will be held to the same emissions standards. Further, the Department

of Transportation’s National Highway Traffic Safety Administration (NHTSA) will

increase light truck fuel economy starting in MY2005.

Definition of “Light Truck”

For the purposes of fuel economy standards, NHTSA defines a light truck as any

truck or “truck derivative” with a gross vehicle weight rating (GVWR) of 8,500 pounds

or less, and a vehicle curb weight (VCW) of 6,000 pounds or less.6 (49 CFR 523) SUVs

and mini-vans are usually built on truck chassis, or have other truck-like characteristics

(e.g. 4 wheel drive and/or flat loading areas), and are therefore classified as light trucks.

EPA uses the same basic definition of a light truck, under the current “Tier 1”

emissions standards. However, a distinction is made between different vehicle types

(Light-Duty Truck 1 through 4), based on weight and payload.

Finally, some SUVs and pickups are so large (greater than 8,500 lbs. GVWR) that

they do not qualify as “light trucks” under the current standards. These include the largest

full-sized pickups, passenger vans, and SUVs. However, EPA recently added the

classification “medium-duty passenger vehicle” to include heavy passenger vehicles —

passenger vans and SUVs up to 10,000 GVWR starting in MY2004. Heavy pickups and

cargo vans will not be affected, since their main function is transporting cargo, as opposed

3

Heavier-duty uses generally require greater vehicle weight, which tends to increase emissions

and decrease fuel economy.

4

Automotive News. The 100-Year Almanac and 1996 Market Data Book. p. 120.

5

Ward’s Communications. 2002 Ward’s Automotive Yearbook. pp. 243-245.

6

GVWR: the weight of the vehicle plus the designed maximum load capacity. VCW: the

weight of the vehicle with all standard equipment and the fuel tank at nominal capacity.

CRS-3

to passengers.7 This change is only for emissions standards, and will not affect fuel

economy standards.

Fuel Economy Standards

The Energy Policy and Conservation Act requires Corporate Average Fuel Economy

(CAFE) standards for motor vehicles. Under the standards, the average fuel economy of

all vehicles of a given class that a manufacturer sells in a model year must be equal to or

greater than the standard. These standards were first enacted in response to the desire to

reduce petroleum consumption and promote energy security after the Arab oil embargo.

The current law sets the CAFE standard for passenger cars at 27.5 miles per gallon (mpg).

Furthermore, this law gives NHTSA the authority to define other classes of vehicles, and

set fuel economy standards for those vehicles. Currently, the average fuel economy of

light trucks — as they are defined above — is regulated at 20.7 mpg. (49 CFR 533)

Fuel economy standards for light trucks were steadily tightened through the 1980s

and early 1990s, and were completely standardized (for all light truck sub-classes) in

MY1996. Passenger car standards have remained unchanged since MY1990. NHTSA has

the regulatory authority to set CAFE standards for a given model year taking into account

technological feasibility, economic practicability, other vehicle standards, and the need

to conserve energy. Between FY1996 and FY2001, however, Congress expressly

prohibited NHTSA from using any funds to change CAFE standards.8

For FY2001, the Senate agreed to accept this CAFE language only if NHTSA, along

with the National Academy of Sciences, was permitted to conduct a study of fuel

economy and recommend appropriate CAFE standards (P.L. 106-346). The panel

concluded that light truck fuel economy can be increased without significant cost

increases and without harming the auto industry, if given significant lead time.9 The

National Energy Policy Report, produced by the Bush Administration, recommended that

NHTSA review and provide recommendations on increasing CAFE standards, taking into

account the NAS study.10

New Light Truck CAFE Standards. On April 1, 2003, NHTSA finalized higher

CAFE standards for light trucks starting in MY2005.11 The new standards would be set

at 21.0 mpg for MY 2005, 21.6 mpg for MY2006, and 22.2 mpg for MY2007 (a total

increase of 1.5 mpg). In its final rule, NHTSA predicts that the new standards will save

3.6 billion gallons of gasoline over the life of the vehicles covered. While NHTSA

concluded that the average cost would be only $47 per vehicle to meet the 2007 standards,

some auto makers in public comments on the rulemaking contended that the costs would

7

Environmental Protection Agency (EPA), Regulatory Announcement: EPA’s Program for

Cleaner Vehicles and Cleaner Gasoline. December 21, 1999.

8

For more information on CAFE standards, see CRS Issue Brief IB90122: Automobile and Light

Truck Fuel Economy: Is CAFE Up to Standards?

9

National Academy of Sciences, National Research Council, Effectiveness and Impact of

Corporate Average Fuel Economy (CAFE) Standards. Washington, D.C. 2002.

10

National Energy Policy Development Group, National Energy Policy. May 2001. p. 4-9.

11

67 Federal Register 77015-77029. December 16, 2003.

CRS-4

be considerably higher and that the costs would not be shared evenly among

manufacturers.12 Further, manufacturers claimed that NHTSA’s projections for efficiency

improvements may not be realized, especially if the upward trend in vehicle size and

weight continues.

Also in public comments on the rulemaking, Environmental Defense and the Union

of Concerned Scientists claimed that NHTSA failed to set the maximum achievable

standard, and that the standards could be feasibly set in the range of 23.8 to 24.4 mpg by

MY2007. They claimed that NHTSA made conservative assumptions in developing the

proposal and ignored some efficient technologies altogether.13

In addition to the new light truck standards, on December 29, 2003, NHTSA issued

an advanced notice of proposed rulemaking seeking feedback on possible ways to amend

the CAFE system. Options under consideration include attribute-based standards (e.g.

weight, volume) as opposed to one standard for light trucks and another for cars, new subclasses for light trucks, and standards requiring a minimum percentage increase for all

vehicles.

Other Issues. Even though the CAFE provisions in EPCA were not enacted for

the purpose of achieving environmental goals, some environmentalists argue that

increased fuel economy would promote better air quality, reduce greenhouse gas

emissions, limit dependence on foreign oil, and lower consumer expenditures at the pump.

Meanwhile, U.S. automobile industry spokespersons argue that CAFE standards have

little or no effect on oil imports, promote more consumption (through lower annual fuel

costs), and give an advantage to foreign manufacturers (which produce smaller vehicles).

In addition, since EPCA only addresses the need to conserve energy, environmental

justifications for tougher standards have been challenged by opponents. Moreover, some

consumer groups argue that CAFE standards lead to decreased vehicle safety, because a

common method for reducing fuel consumption is to reduce vehicle weight.

Congressional Concerns and Activity. CAFE standards have been a

contentious issue in congressional debates. This is especially true as they relate to

greenhouse gas emissions and the potential for global warming, as well as the desire to

promote energy security. The most significant piece of CAFE-related legislation in the

108th Congress was H.R. 6, the omnibus energy bill. The conference report on H.R. 6

(H.Rept. 108-375) would not have changed fuel economy standards, but would have

authorized $2 million annually for FY2004 through FY2008 for NHTSA to conduct

CAFE rulemakings. In addition, the conference report would have required NHTSA to

add safety and the effects on the U.S. auto industry to the list of factors it must consider.

The report was issued on November 17, 2003. The House approved the report on

November 18. On November 21, a cloture motion on the bill failed in the Senate.

In addition to the energy bill, a few stand-alone proposals on CAFE were introduced

in the 108th Congress. H.R. 1605 (Gilchrest) and S. 255 (Feinstein) would have increased

12

Pamela Najor, “Big Three Automakers Differ on Ability to Meet Tougher Fuel Economy

Standard,” Daily Environment Report. February 24, 2003. p. A-9.

13

Pamela Najor, “Environmental Groups Say CAFE Proposal Fails to Achieve Maximum

Feasible Standard,” Daily Environment Report. February 24, 2003. p. A-10.

CRS-5

light truck CAFE to 27.5 miles per gallon by MY2011. Further, these bills would also

have amended the definition of “light truck” to include all vehicles up to 10,000 pounds

gross weight. Both bills were referred to committee.

Emissions Standards

Before 1975, all light trucks were classified by EPA as “light duty vehicles” (i.e.,

passenger cars). However, in a case brought by International Harvester, the U.S. Court

of Appeals concluded that light trucks should be classified differently, due to the

agricultural and commercial nature of their use.14 Therefore, light trucks were given their

own classification and have faced less stringent emissions standards since MY1975.

Under the CAA “Tier 1” standards, light trucks were allowed to emit higher levels of

pollution with each heavier weight class. Furthermore, Tier 1 standards for light trucks

were generally less stringent than those for passenger cars. Only trucks in the lightest

class meet the same standards as passenger cars. Most SUVs and pickups, and all vans,

were permitted to emit 29% to 47% more carbon monoxide (CO) and 75% to 175% more

nitrogen oxides (NOx ) than passenger cars. (40 CFR 86)

Tier 2 Standards. The Clean Air Act gives EPA the authority to set standards for

MY2004 and beyond, in order to attain and maintain the National Ambient Air Quality

Standards (NAAQS). However, EPA may only tighten emissions standards if the

technology to do so is available and cost-effective. On February 10, 2000, EPA finalized

new standards for passenger cars and light trucks.15 Under the new “Tier 2” standards,

all light trucks and passenger cars, as well as medium-duty SUVs and passenger vans, will

be held to the same emissions standards by MY2009.16

Three primary factors influenced EPA’s decision: use patterns, market share, and

technology. First, according to EPA, today these vehicles “are used like passenger cars

and there are more annual miles traveled as a result.”17 Since these vehicles travel more

miles per year, emissions attributable to the average vehicle have increased. Second, as

was stated above, there are simply more light trucks on the road today. Because of the

increased number of these vehicles, the contribution of the emissions from these vehicles

to vehicular air pollution has similarly increased. Finally, EPA chose to set such stringent

standards for light trucks because new emissions control technology is available to permit

cuts in emissions without decreasing weight or power, and without generating excessive

costs for automobile manufacturers or consumers.

As in many cases over the past thirty years, EPA is following the lead of California,

which has the most stringent automobile emissions standards in the country. In

14

International Harvester Co. v. Ruckelshaus, D.C. Cir. No. 72-1517, Feb. 10, 1973.

15

EPA, Control of Air Pollution from New Motor Vehicles: Tier 2 Motor Vehicle Emission

Standards and Gasoline Sulfur Control Requirements; Final Rule. 65 Federal Register 6698.

February 10, 2000.

16

CRS Report RS20247: EPA’s Tier 2 Proposal for Stricter Vehicle Emission Standards: A Fact

Sheet.

17

64 Federal Register 26035. May 13, 1999.

CRS-6

November 1998, California ruled that beginning in MY 2004, all light trucks must meet

the same emissions standards as passenger cars.18

Issues. The Tier 2 standards have raised three major issues among vehicle

manufacturers, oil refiners and environmentalists:

First, because the heaviest vehicles are exempt from the Tier 1 emissions standards

(since they are not considered “light trucks”), some environmental groups were concerned

that automobile manufacturers would be motivated to “bulk up” their heavier light trucks,

placing them in the heavy truck class, to avoid improving their emissions. Therefore,

EPA added the class of “medium-duty passenger vehicles” to include these vehicles.

Second, with existing technology, emissions reductions are dependent on reductions

in the sulfur content of gasoline.19 Therefore, EPA also promulgated more stringent limits

on gasoline sulfur content. Oil refiners acknowledged that sulfur does affect emission

controls, but claimed that their input was ignored in the rule-making process, and that the

timeline for the rule will greatly increase the cost of gasoline, and will push smaller

refiners out of the market.20 Furthermore, they argue that emissions reductions could be

achieved with considerably smaller cuts in the sulfur level.21 Conversely, automobile

manufacturers have argued that emissions reductions are unattainable without sulfur

reductions, and have expressed support for even greater reductions.

Third, the oil refining industry has questioned whether EPA’s justification of the Tier

2 standards relies on the revised NAAQS for ozone and particulate matter, which EPA

promulgated in July 1997.22 These revised standards were remanded to EPA for further

consideration by the U.S. Court of Appeals in May 1999.23 In June 1999, to deter

potential legal challenges to the Tier 2 standards, EPA issued a notice that justifies the

Tier 2 standards under the previous NAAQS standards for ozone and particulate matter,

which still apply to states that have not yet achieved attainment.24

Congressional Concerns and Activity. No legislation was introduced in the

108 Congress on emissions, but vehicle emissions standards are a matter of

congressional oversight.

th

18

CAA allows states to adopt California emissions standards in lieu of the federal standards. In

the absence of action by EPA, a number of states planned to adopt the California standards. Auto

manufacturers, not wanting to face multiple standards, have been generally supportive of Tier 2.

19

Fore more information, see CRS Report RS20163: Sulfur in Gasoline.

20

Testimony of J. Louis Frank, President, Marathon Ashland Petroleum before the Senate

Committee on Environment and Public works. May 18, 1999.

21

Testimony of Clint W. Ensign, Vice President, Government Relations, Sinclair Oil Corporation

before the House Committee on Science. July 21, 1999.

22

64 Federal Register 38652-38896. July 18, 1997.

23

American Trucking Ass’ns v. EPA, D.C. Cir. No. 94-1440, May 14, 1999.

24

64 Federal Register 35112-35119. June 30, 1999.