§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 official standard (measured without counting credits). The number of credits equals the number of tenths of a mile a gallon the maker’s average exceeds the standard multiplied by how many passenger cars it built that year. Credits can be used for any of the 3 model years before the year they were earned, and if not used then, for any of the 5 model years after. Normally credits are available at the end of the model year. If a maker thinks it will miss a standard, it can give the Secretary of Transportation a plan showing it will earn enough credits in the next 3 model years; if the Secretary approves and the maker earns those credits, they count for the year involved. If a maker is still below the standard after using prior-year credits, the Secretary must notify the maker and give at least 60 days to submit a plan. When credits are applied to a year, they are calculated by how many tenths of a mile a gallon the maker was below the standard times the number of cars made that year, and credits used for one year cannot be used again. The same rules apply to non‑passenger automobiles. The Secretary may set up a program so manufacturers can sell credits to others, as long as overall oil savings are preserved, but trading can’t be used to avoid certain domestic passenger car fuel‑economy rules. The Secretary must also set up rules letting a manufacturer move credits within its own fleet (all cars it makes in a year) among three compliance categories (domestically made passenger cars, non‑domestic passenger cars, and non‑passenger cars). Internal transfers follow the same year limits and the maximum allowed boost to a category is 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. If a civil penalty was paid but it turns out credits covered the shortfall, the Treasury must refund the penalty amount that is due to available credits.