Deal reached in Senate on fuel efficiency standard

Leaders of the Senate Commerce, Science and Transportation Committee recently announced a deal on fuel efficiency standards for automobiles and light trucks. The agreement would increase the Corporate Average Fuel Economy (CAFE) standards to 35 miles per gal by 2020 and require a 4% annual increase to the standard in subsequent years. Under the plan, medium and heavy-duty trucks also would be subject to a 4% increase in fuel efficiency.

Current CAFE standards for passenger vehicles are 27.5 mpg and 20.7 mpg for light trucks, although the standard for light trucks is set to increase to 24 mpg by 2011.

More stringent fuel efficiency standards have the effect of reducing revenue into the Highway Trust Fund, thereby placing greater urgency on identifying a long-term replacement to the per gallon federal excise tax on motor fuels.

The committee may consider the bill as early as next week.