NATURAL GAS FOR CARS AND TRUCKS: OPTIONS AND CHALLENGES - Natural Gas-powered Cars and Trucks: Options and Issues - page 17

Fuel Economy and Greenhouse Gas Standards
Vehicle greenhouse gas emissions and fuel economy are regulated under
the Clean Air Act (CAA) and the Energy Policy and Conservation Act
(EPCA). EPA has authority to regulate greenhouse gas emissions while the
National Highway Traffic Safety Administration (NHTSA) administers the
Corporate Average Fuel Economy (CAFE) standards. 88 However, vehicle fuel
consumption and greenhouse gas emissions are tightly linked, so the two
agencies have issued joint rules since 2012. By model year (MY) 2025,
passenger car light truck fuel economy will roughly double, and vehicle
greenhouse gas emissions will be roughly cut in half compared to MY2007.
Within the two programs, there are incentives for automakers to produce
natural gas vehicles. First, as noted above, natural gas vehicles generally emit
fewer greenhouse gases than conventional vehicles, making compliance easier.
Further, the CAFE standards are based on petroleum consumption: Vehicles
operating on non-petroleum fuels generate credits under the program that
effectively treat those vehicles as if they had significantly higher fuel economy.
Depending on how expensive it is for automakers to comply with the new
regulations, these incentives may help offset the incremental cost of natural gas
vehicles.
E XISTING F EDERAL AND S TATE P ROGRAMS
Federal Programs
While federal programs supporting alternative vehicles have been centered
on electric battery research and manufacturing, at least five federal programs
have brought more attention to natural gas vehicles.
Energy Policy Act of 1992
Among the provisions of the Energy Policy Act of 1992 (P.L. 102-486), 89
federal agencies, state governments, and alternative fuel providers 90 are
required to purchase alternative fuel vehicles. This law mandates that a certain
percentage of new passenger vehicles (such as police cars) must be capable of
operating on alternative fuels, including ethanol, methanol, natural gas, and
propane.