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Fuel economy report shows cruisers, stragglers

WASHINGTON -- It has been two years since the Obama administration put the finishing touches on rules requiring cars and light trucks to average 54.5 mpg by the 2025 model year.

The standards only get stricter from here, but so far, automakers appear to be on track, according to a dense, 59-page document that the EPA released last month.

It was the agency's first "performance report" on the fuel economy standards, and it answered two main questions about the program:

  •  How many "credits" do automakers have in total?

EPA credits are the currency of President Barack Obama's fuel economy program. Each credit earned represents one metric ton of carbon dioxide kept out of the atmosphere.

Some companies are poor. Toyota Motor Corp. and Honda Motor Co. are staggeringly rich.

Automakers racked up credits before the program took effect because the EPA decided they deserved a reward for selling efficient cars before the law required it. Toyota and Honda benefited most and held a combined 136.7 million credits at the beginning of the 2013 model year -- 60 percent of whole industry's pot of credits.

Bank balance
Emissions credits are the currency of the EPA's fuel economy rules, with each credit representing 1 metric ton of carbon dioxide kept out of the atmosphere. Automakers that sold efficient cars before the rules took effect got to rack up credits in advance.
Company and credit balance at start of 2013 model year
For richer For poorer 
Nissan16,651,263Jaguar Land Rover–424,032
Source: EPA

To understand the impact of that, consider Toyota's Lexus brand, which has kept using V-6 engines as its German rivals switch to turbocharged four-cylinder engines.

Compared with the Mercedes-Benz C class, BMW 3 series and Audi A4, the Lexus ES sedan now offers more power (268 hp) and worse fuel economy (24 mpg combined) from its base engine. Lexus can afford to stress power over fuel economy because it is in no danger of running out of credits.

2012 statement
This table shows how automakers' vehicles performed in their emissions for the 2012 model year compared with federal standards. The higher the number, the better the company's performance and the more emissions credits it earns. Companies with negative numbers must spend credits or change their products to meet standards.
Company and emissions surplus or deficit in grams of CO2/mile
Subaru9.4Jaguar Land Rover–35.5
Source: EPA

  •  How did companies fare in the 2012 model year alone?

Automakers have planned lineups years into the future to comply with the coming fuel economy standards. The EPA's report on CO2 emissions per mile provides a snapshot of which companies were on track in the 2012 model year to meet those standards, and which ones will need to dig themselves out of a hole.

If a company is in the negative in this column, it is because its vehicles emitted more CO2 than standards allowed. To get back on track, it would have to expend some of its accumulated emissions credits, buy credits from another manufacturer or modify its vehicles.

Nearly half of automakers were in the negative at the end of the 2012 model year. If more companies join that group in coming years, the industry may be in trouble.

Over the 2010, 2011 and 2012 model years, more than 1 million emissions credits changed hands between automakers, with credit-rich Honda, Nissan and Tesla selling to Ferrari, Chrysler and Mercedes-Benz.

• Nissan sold 500,000 credits to Chrysler.

• Nissan sold 250,000 credits to Mercedes-Benz.

• Tesla sold 227,713 credits to Mercedes-Benz.

• Honda sold 90,000 credits to Ferrari.

Note: Each credit represents 1 metric ton of carbon dioxide emissions. Source: EPA

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