§32903 Credits for Exceeding Average Fuel Economy Standards

Summary

Manufacturers earn credits when the average fuel economy of the passenger cars they make in a model year is higher than the required standard (the comparison ignores any credits). They can use those credits to cover shortfalls in any of the three model years before the year they earned them, and in up to five model years after. Normally credits are available at the end of the model year, but a maker that expects it will fall short can give the Transportation Secretary a plan showing it will earn enough credits within the next three model years. If the Secretary approves the plan and the maker then earns the promised credits, those credits can be used for the earlier year. If a maker is still below the standard after using prior credits, the Secretary must 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 maker’s fleet is above the standard, multiplied by the number of cars made that year. Credits applied to a model year are used up and gone. The Secretary may set up rules for trading credits between makers so those who beat the standards can sell credits to those who miss them, while keeping the same total oil savings. Credits can also be moved within a maker’s own fleet between the three compliance categories (domestically made passenger cars, non-domestic passenger cars, and non-passenger cars). Transfers follow timing rules and are limited in how much they can raise a category’s fuel economy: 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 can be transferred. Trading or transfers into the domestic passenger-car category are limited so that the domestic-car rules still apply. If a maker paid a civil penalty but later had credits that cover it, the Treasury must refund the penalty amount tied to those credits.