President Obama and Auto Companies Agree to New Fuel 54.5 MPG Standard

President Obama just announced a new fuel standard for auto companies that will save 23 billion gallons of gasoline by 2030 and avoid the annual emissions of 72 coal-fired power plants each year. The standard requires manufacturers to meet a 54.5 mpg standard by 2025 — an agreement significantly higher than what auto companies fought for.

The move is being hailed as a rare environmental win for Obama at a time when Republicans are fighting to roll back almost every major energy and environment program created in the last few decades. The new standard could create more than 60,000 jobs in the auto sector as manufacturers develop new technologies to meet the targets. The United Autoworkers Union was an early supporter of the new standard because of the job-creation opportunities it would create.

However, the fuel standard does include a “re-opener” that could allow auto companies to re-negotiate standards after 2021.