RS20298: Sport Utility Vehicles, Mini-Vans and Light Trucks:
An Overview of Fuel Economy and Emissions Standards

Brent D. Yacobucci

Environmental Policy Analyst
Resources, Science, and Industry Division

Updated January 16, 2001

Summary

Most sport utility vehicles, mini-vans, and pickups are classified as "light trucks" and thus are regulated less stringently than passenger cars under two major laws--the Energy Policy and Conservation Act for fuel economy standards, and the Clean Air Act for emissions standards. These differences came about because at the time the laws were passed, light trucks were used differently, and because they represented a much smaller share of the automobile market. Over the past decade, however, these vehicles have dramatically increased their share of the new automobile market. Therefore, the share of total fuel consumption and emissions attributable to these vehicles has steadily increased. In response to this trend, the Environmental Protection Agency has ruled that by model year 2009, emissions from all light trucks and passenger cars will be regulated equally. However, since fiscal year 1996, provisions in the Department of Transportation's (DOT) annual appropriations have prohibited DOT from changing fuel economy standards. The issue for Congress is whether these vehicles should continue to be treated differently from passenger cars. This short report, which will be updated as events warrant, discusses the discrepancy between emissions and fuel economy standards for passenger cars and light trucks, how that discrepancy is changing, and legislative activity related to these issues.

Introduction

Sport utility vehicles and other light trucks are regulated through two laws that affect their fuel use and emissions: the Energy Policy and Conservation Act of 1975 (EPCA) ⁽¹⁾ and the Clean Air Act (CAA). ⁽²⁾ EPCA first set fuel economy standards for the 1977 model year (MY1977). Since then, all light trucks--including most sport utility vehicles (SUVs) and all mini-vans--have been held to less stringent fuel economy standards than passenger cars. Furthermore, since MY1975, most light trucks have faced less stringent emissions standards under Clean Air Act regulations. The differences in standards reflected the situation prevalent at the time these laws were enacted: first, light trucks were mainly used as commercial and agricultural work vehicles ⁽³⁾; second, they were a relatively small portion of the U.S. automobile market.

Since then, conditions have changed significantly. Today, light trucks are a larger portion of the total vehicle population, and travel more annual vehicle miles. For example, in 1980, light trucks composed 19.9% of the U.S. new automobile market. ⁽⁴⁾ By 1999, this figure had increased to 48.3%; SUVs alone accounted for 18.6% of the new vehicle market in 1999, while mini-vans accounted for 7.9%. ⁽⁵⁾ However, a comparison of market share underestimates this growth and its consequences. While the number of passenger cars sold each year in the United States has decreased somewhat since 1980, the number of light trucks sold has more than tripled, from 2.2 million in 1980 to 8.2 million in 1999. In 1999, SUV sales alone (3.1 million) exceeded total light truck sales for 1980. As a result, the total fuel usage and emissions attributable to these vehicles has increased.

Because of the increased emissions from light trucks, the Environmental Protection Agency (EPA) has ruled that by MY2009, all light vehicles (including all passenger cars and SUVs, and most vans and pickups--all but the very largest vehicles) will be held to the same emissions standards. Congress has prohibited similar action regarding fuel economy through provisions in annual appropriations bills for the Department of Transportation (DOT) since FY1996 legislation in 1995. ⁽⁶⁾

Definition of "Light Truck"

For the purposes of fuel economy standards, DOT defines a light truck as any truck or "truck derivative" with a gross vehicle weight rating (GVWR) of 8,500 pounds or less, and a vehicle curb weight (VCW) of 6,000 pounds or less. ⁽⁷⁾ SUVs and mini-vans are usually built on truck chassis, or have other truck-like characteristics (e.g. 4 wheel drive and flat loading areas), and are therefore classified as light trucks.

EPA uses the same basic definition of a light truck, under the current "Tier 1" emissions standards. However, a distinction is made between different vehicle types (Light-Duty Truck 1 through 4), based on GVWR and either loaded vehicle weight (LVW) or adjusted loaded vehicle weight (ALVW). ⁽⁸⁾ The Light-Duty Truck (LDT) 1 category includes compact SUVs (e.g. Chevrolet Tracker) and a few small pickup trucks (e.g. Toyota Tacoma). The next category, LDT2, includes most light pickups, all mini-vans and most SUVs (e.g. Ford Explorer). The LDT3 and LDT4 categories include full-sized pickups, passenger vans and larger SUVs (e.g. Dodge Durango).

Finally, some SUVs and pickups are so large (greater than 8,500 lbs. GVWR) that they do not qualify as "light trucks" under the current standards. These include the largest full-sized pickups and passenger vans, and larger models of the Ford Excursion and Chevrolet Suburban SUVs. However, EPA recently added the classification "medium-duty passenger vehicle" to include heavy passenger vehicles-passenger vans and SUVs up to 10,000 GVWR starting in MY2004. Heavy pickups and cargo vans will not be affected, since their main function is transporting cargo, as opposed to passengers. ⁽⁹⁾ This change is only for emissions standards, and will not affect fuel economy standards.

Fuel Economy Standards

The Energy Policy and Conservation Act requires Corporate Average Fuel Economy (CAFE) standards for motor vehicles. Under the standards, the average fuel economy of all vehicles of a given class that a manufacturer sells in a model year must be equal to or greater than the standard. These standards were first enacted in response to the desire to reduce petroleum consumption and promote energy security after the Arab oil embargo. The current law sets the CAFE standard for passenger cars at 27.5 miles per gallon. Furthermore, this law gives DOT the authority to define other classes of vehicles, and set fuel economy standards for those vehicles. Currently, the average fuel economy of light trucks--as they are defined above--is regulated at 20.7 miles per gallon. (49 CFR 533)

Fuel economy standards for light trucks were steadily tightened through the 1980s and early 1990s, and were completely standardized (for all light truck sub-classes) in MY1996. Passenger car standards have remained unchanged since MY1990. DOT has the regulatory authority to set CAFE standards for a given model year taking into account technological feasibility, economic practicability, other vehicle standards, and the need to conserve energy. Since fiscal year 1996 (FY1996), however, Congress has expressly prohibited DOT from using any funds to change CAFE standards. Because DOT may not spend money to "prepare, propose or promulgate any regulations...prescribing [revised] fuel economy standards,"the standards have remained constant. ⁽¹⁰⁾

Emissions Standards

Before 1975, all light trucks were classified by EPA as "light duty vehicles", i.e. passenger cars. However, in a case brought by International Harvester, the U.S. Court of Appeals concluded that light trucks should be classified differently, due to the agricultural and commercial nature of their use. ⁽¹¹⁾ Therefore, light trucks were given their own classification and have faced less stringent emissions standards since MY1975. Under the current CAA "Tier 1" standards, light trucks are allowed to emit higher levels of pollution with each heavier weight class. Furthermore, Tier 1 standards for light trucks are generally less stringent than those for passenger cars. Only vehicles in the LDT1 class (trucks under 3,501 lbs. LVW) meet the same standards as passenger cars. ⁽¹²⁾ Most SUVs and pickups, and all vans, are permitted to emit 29% to 47% more carbon monoxide (CO) and 75% to 175% more nitrogen oxides (NO_x ) than passenger cars. (40 CFR 86)

Tier 2 Standards. The Clean Air Act gives EPA the authority to set standards for model years 2004 and beyond, in order to attain and maintain the National Ambient Air Quality Standards (NAAQS). However, EPA may only tighten emissions standards if the technology to do so is available and cost-effective. On February 10, 2000, EPA finalized new standards for passenger cars and light trucks. ⁽¹³⁾ Under the new "Tier 2" standards, all light trucks and passenger cars (up to 8,500 pounds GVWR) will be held to the same emissions standards by MY2009. ⁽¹⁴⁾

Reasons for the Proposed Change. Because EPA determined that further reductions in emissions from light trucks would be necessary for states to attain and maintain the NAAQS, the agency chose to issue stricter regulations of light truck emissions. Three primary factors influenced EPA's decision: use patterns, market share, and technology. First, when used as agricultural, commercial, or off-road vehicles, light trucks are generally not driven over great distances. However, according to EPA, today these vehicles "are used like passenger cars and there are more annual miles traveled as a result." ⁽¹⁵⁾ This is consistent with a poll which showed that 87% of the owners of a particular SUV had never taken their vehicle off the highway. ⁽¹⁶⁾ Since these vehicles travel more miles per year, emissions attributable to the average vehicle have increased.

Second, as was stated above, there are simply more light trucks on the road today. The market share of light trucks has grown steadily over the past two decades, and while sales of new passenger cars have remained steady, light truck sales have more than tripled. Because of the increased number of these vehicles, the contribution of the emissions from these vehicles to vehicular air pollution has similarly increased.

Finally, EPA chose to set such stringent standards for light trucks because new catalytic converter technology is available to permit cuts in emissions without decreasing weight or power, and without generating excessive costs for automobile manufacturers or consumers. However, while newer catalytic converters are very effective at controlling exhaust emissions, they are highly sensitive to the sulfur content in gasoline. Therefore, as part of the Tier 2 regulations, EPA is also requiring oil refiners to significantly cut sulfur in gasoline from an average of approximately 300 parts per million (ppm) to an average of 30 ppm and a maximum of 80 ppm by 2004. ⁽¹⁷⁾

As in many cases over the past thirty years, EPA is following the lead of California, which has the most stringent automobile emissions standards in the country. In November 1998, California ruled that beginning in MY 2004, all light trucks must meet the same emissions standards as passenger cars. Furthermore, as of 1996, California has required a much lower gasoline sulfur content than the national average. EPA decided to align national standards with California standards so that manufacturer requirements would be uniform nationwide. ⁽¹⁸⁾

Issues. The Tier 2 standards have raised three major issues among vehicle manufacturers, oil refiners and environmentalists:

First, because the heaviest vehicles are exempt from the Tier 1 emissions standards (since they are not considered "light trucks"), some environmental groups were concerned that automobile manufacturers would be motivated to "bulk up" their heavier light trucks, placing them in the heavy truck class, to avoid improving their emissions. Therefore, EPA added the class of "medium-duty passenger vehicles" to include heavy SUVs and passenger vans under the Tier 2 emissions standards. This change, however, will not affect the definition of "light truck" for the fuel economy standards.

Second, with current pollution control technologies, decreases in emissions are dependent on reductions in the sulfur content of gasoline. While oil refiners acknowledge that sulfur does affect emission controls, they have voiced concerns about the Tier 2 sulfur requirements. Gasoline refiners claim that their input was ignored in the rule-making process, and that the timeline for the rule would greatly increase the cost of gasoline, and would push smaller refiners out of the market. ⁽¹⁹⁾ Furthermore, they argue that emissions reductions could be achieved with considerably smaller cuts in the sulfur level. ⁽²⁰⁾ They also argue that a regional approach, with less stringent requirements in certain states, would achieve the required results at far less cost. Conversely, automobile manufacturers have argued that emissions reductions (which they generally support) are unattainable without reductions in sulfur, and have expressed support for even greater reductions.

Third, the oil refining industry has questioned whether EPA's justification of the Tier 2 standards relies on the revised NAAQS for ozone and particulate matter, which EPA promulgated in July 1997. ⁽²¹⁾ These revised standards were remanded to EPA for further consideration by the U.S. Court of Appeals in May 1999. ⁽²²⁾ In June 1999, to deter potential legal challenges to the Tier 2 standards, EPA issued a notice that justifies the Tier 2 standards under the previous NAAQS standards for ozone and particulate matter, which still apply to states that have not yet achieved attainment. ⁽²³⁾

Congressional Concerns and Activity

Regulation of SUVs and light trucks is a contentious issue. Some environmentalists argue that these vehicles waste fuel and pollute excessively. Meanwhile, vehicle manufacturers and other interest groups argue that tougher regulation of these vehicles would limit consumer choice in the market. For the past few years, the question of CAFE standards has been an issue in the debate over DOT appropriations. No legislation has been proposed on emissions, but the current Tier 1 standards and upcoming Tier 2 standards are a matter of congressional oversight. As was stated above, the tighter EPA emissions standards should not affect vehicle weight or power output. Therefore, a decrease in regulated emissions will not likely lead to a decrease in fuel consumption.

Even though the CAFE provisions in EPCA were not enacted for the purpose of achieving environmental goals, some environmentalists argue that increased fuel economy would promote better air quality, reduce greenhouse gas emissions, limit dependence on foreign oil, and lower consumer expenditures at the pump. Meanwhile, U.S. automobile industry spokespersons argue that CAFE standards have little or no effect on oil imports, promote more consumption (through lower annual fuel costs), and give an advantage to foreign manufacturers (which produce smaller vehicles). In addition, since EPCA only addresses the need to conserve energy, environmental justifications for tougher standards have been challenged by opponents. Moreover, some consumer groups argue that CAFE standards lead to decreased vehicle safety, because a common method for reducing fuel consumption is to reduce vehicle weight.

Although the Energy Policy and Conservation Act gives DOT the authority to regulate fuel economy standards for light trucks and passenger cars, annual provisions in DOT's funding legislation have effectively prevented the exercise of that authority. The House version of the DOT appropriations bill for FY2001 (P.L. 106-346) contained this provision, while the Senate version did not. In conference, the Senate agreed to accept the House provision-section 320-only if DOT, along with the National Academy of Sciences, was permitted to conduct a study of fuel economy and recommend appropriate CAFE standards. The final law earmarks up to $1 million for the study, and requires that the study must take into account the factors outlined in EPCA (feasibility, economics, and energy conservation), as well as vehicle safety and the effects on the auto industry. However, for DOT to promulgate new standards, the recommendations would need to be approved by a joint resolution of Congress.

Footnotes

1. ^(back)P. L. 94-163, Section 301; 49 U.S.C. 32902.

2. ^(back)42 U.S.C. 7521.

3. ^(back)Heavier-duty uses generally require greater vehicle weight, which tends to increase emissions and decrease fuel economy.

4. ^(back)Automotive News. The 100-Year Almanac and 1996 Market Data Book. p. 120.

5. ^(back)Automotive News. 2000 Market Data Book. p. 50.

6. ^(back)The most recent being the Department of Transportation and Related Agencies Appropriations Act, FY2001, P.L. 106-346.

7. ^(back)GVWR: the weight of the vehicle plus the designed maximum load capacity. VCW: the weight of the vehicle with all standard equipment and the fuel tank at nominal capacity.

8. ^(back)LVW: VCW plus 300 pounds. ALVW: average of VCW and GVWR.

9. ^(back)Environmental Protection Agency (EPA), Regulatory Announcement: EPA's Program for Cleaner Vehicles and Cleaner Gasoline. December 21, 1999.

10. ^(back)For more information on CAFE standards, see CRS Issue Brief IB90122: Automobile and Light Truck Fuel Economy: Is CAFE Up to Standards?

11. ^(back)International Harvester Co. v. Ruckelshaus, D.C. Cir. No. 72-1517, Feb. 10, 1973.

12. ^(back)These vehicles (compact SUVs and pickups) comprise approximately 17% of the light truck market. Source: EPA. Office of Mobile Sources. Tier 2/Sulfur Draft Regulatory Impact Analysis. April 1999. p. V-25.

13. ^(back)EPA, Control of Air Pollution from New Motor Vehicles: Tier 2 Motor Vehicle Emission Standards and Gasoline Sulfur Control Requirements; Final Rule. 65 Federal Register 6698. February 10, 2000.

14. ^(back) CRS Report RS20247 EPA's Tier 2 Proposal for Stricter Vehicle Emission Standards: A Fact Sheet.

15. ^(back)64 Federal Register 26035. May 13, 1999.

16. ^(back)Ford Motor Company, as cited in "Harper's Index." Harper's Magazine. May 1998. p. 15.

17. ^(back)For more information, see CRS Report RS20163: Sulfur in Gasoline.

18. ^(back)The Clean Air Act allows states with nonattainment areas to adopt California emissions standards in lieu of the federal standards. In the absence of action by EPA, a number of states were likely to adopt the California standards. Automobile manufacturers, not wanting to face a checkerboard of standards, have been generally supportive of the Tier 2 standards.

19. ^(back)Testimony of J. Louis Frank, President, Marathon Ashland Petroleum before the Senate Committee on Environment and Public works. May 18, 1999.

20. ^(back)Testimony of Clint W. Ensign, Vice President, Government Relations, Sinclair Oil Corporation before the House Committee on Science. July 21, 1999.

21. ^(back)64 Federal Register 38652-38896. July 18, 1997.

22. ^(back)American Trucking Ass'ns v. EPA, D.C. Cir. No. 94-1440, May 14, 1999.

23. ^(back)64 Federal Register 35112-35119. June 30, 1999.