On December 20, 2021, the Environmental Protection Agency (EPA) finalized its greenhouse gas (GHG) emissions standards for passenger cars and light trucks for Model Years (MY) 2023 through 2026.[1] According to the EPA, the standards are the most ambitious vehicle GHG emissions standards ever established for the light-duty vehicle sector in the U.S. The EPA’s final standards for 2025 and 2026 are more ambitious than those proposed in the initial rulemaking stage in August of 2021.

The final standards will unlock $190 billion in net benefits, including reduced impacts of climate change, improved public health from lower pollution, and cost savings for vehicle owners through improved fuel efficiency. The EPA projects that as the GHG standards get stronger over four years, sales of electric vehicles and plug-in hybrid vehicles will grow from about 7% market share in MY 2023 to about 17% in MY 2026. The standards will also result in avoiding more than 3 billion tons of GHG emissions, equivalent to more than half the total of U.S. CO2 emissions in 2019. Though the standards are ambitious, the EPA said that they provide adequate time for manufacturers to comply at reasonable costs. The final standards also put the light-duty vehicle GHG program on track to launch the next phase of standards for MY 2027 and beyond. The EPA is planning to initiate a separate rulemaking to set standards for MY 2027 and later in compliance with Biden’s “Executive Order on Strengthening American Leadership in Clean Cars and Trucks.”

[1] https://www.epa.gov/newsreleases/epa-finalizes-greenhouse-gas-standards-passenger-vehicles-paving-way-zero-emissions