President Obama: New automotive decree: 54.5 mpg by 2025

President Obama has announced a proposal with the backing of car manufacturers from General Motors to Ford and Hyundai to Toyota to improve the fuel efficiency of vehicles to 54.5 mpg by and substantially reduce green house gas emissions by 2025.

Chrysler, BMW, Honda, Jaguar/Land Rover, Kia, Mazda, Mitsubishi, Nissan and Volvo also approve the plan, which means it will affect more that 90 percent of all vehicles sold in the United States.

The announcement extends a 2009 agreement with the auto industry to improve fuel efficiency in the next five years.

Fuel efficiency is currently controlled by the Corporate Average Fuel Economy (CAFE) within the Department of Transportation, which was enacted by Congress in 1975 in response to the 1973-74 Arab oil embargo.

Since 1990, the passenger car fuel standard has been at 27.5 miles per gallon. Under Obama’s plan, manufacturers would have to boost fuel efficiency to 35.5 miles per gallon between 2012 and 2016 and to 54.5 miles per gallon by 2025. Greenhouse gas emissions would be required to be reduced to 163 grams per mile.

According to the White House, this could result in $1.7 trillion in fuel savings over the life of the program and reduce oil consumption in the country by about 2.2 million barrels per day by 2025. It also brings the nation about halfway to Obama’s goal of reducing oil imports by a third by 2025.

Scott Becker, senior vice president of Administration and Finance at Nissan Americas, echoed the opinion of many manufacturers”

“The Obama administration has issued some extremely challenging greenhouse gas reduction and fuel economy improvement targets, but Nissan is a company built on innovation and we’re up to the task,” Becker said in a statement.

“Nissan’s recent product introductions – including the all-electric Nissan LEAF, the Infiniti M Hybrid and improvements to internal-combustion technology – demonstrate our multifaceted approach to meeting consumer demand for increased fuel economy across our product lineup and to achieving these rigorous targets.”