§32903 Credits for exceeding average fuel economy standards

Summary

Manufacturers that make passenger cars that beat the required fuel economy standard earn credits. They can use those credits for any of the 3 model years before the year they earned them, or for up to 5 model years after. Credits usually become available at the end of the model year, but a manufacturer can ask before the year ends to use future credits if it shows a plan that it will earn enough credits within the next 3 model years; the Secretary of Transportation must approve the plan unless it seems unlikely to work. If a maker is still below the standard after using earlier credits, the Secretary will tell the maker and give at least 60 days to submit a plan. The number of credits equals (the number of tenths of a mile per gallon the fleet exceeded the standard) times (the number of cars made that year). Credits used for a model year are gone after use. The Secretary must give written notice and a chance to comment before applying credits. The same rules apply to non-passenger vehicles. The Secretary may set up a credit trading program so makers who exceed standards can sell credits to those who fall short, while keeping the same total oil savings. The Secretary must also allow a maker to transfer credits within its own fleet between three compliance categories (domestic passenger cars, non-domestic passenger cars, and non-passenger cars). Transferred credits can be used in the same years they otherwise could be and in the year earned. The allowed increase in a category from transfers is limited to 1.0 mpg for 2011–2013, 1.5 mpg for 2014–2017, and 2.0 mpg for 2018 and later. Only credits earned after model year 2010 may be transferred. If a civil penalty was paid that is tied to credits a manufacturer had, the Treasury must refund the part of the penalty that was due to those credits.