Sen. Mike Crapo (R., Idaho) is preparing to introduce first-of-its-kind legislation that would scrap fuel efficiency rules for vehicles, regulations that Republicans say have cost consumers billions of dollars. The bill, titled the Restoring Affordability in Automobile Manufacturing Act, would end a decades-old program requiring the federal government to set environmental fuel efficiency standards for cars and trucks.
Crapo, the Senate Finance Committee's chairman, says the bill would save Americans money and ensure the federal government is unable to use the so-called corporate average fuel economy (CAFE) program to implement a 'de facto electric vehicle mandate' or other broad climate objectives. The CAFE program was created by Congress in the 1970s to limit fuel consumption during the oil crisis, but has since been reimagined as a tool to achieve environmental goals.
The CAFE program works by setting a standard for the average fuel economy of new vehicles sold by each automaker. The standard is set by the National Highway Traffic Safety Administration (NHTSA) and the Environmental Protection Agency (EPA), and is based on the projected fuel economy of new vehicles. Automakers that fail to meet the standard can face fines and other penalties.
The Biden administration finalized CAFE standards in 2024 that would have doubled fuel efficiency requirements in new cars, something automakers said was unachievable, costly, and designed to incentivize purchases of expensive electric vehicles. Last year, President Donald Trump reset the CAFE standards, calling the Biden-era regulations 'ridiculously burdensome' and 'horrible'. The CAFE program has been a central pillar in Democrats' and activists' climate agenda, and its elimination is likely to garner significant pushback from supporters of the program.
According to a 2022 report from the right-leaning Mackinac Center for Public Policy, an increase in CAFE standards of just 1 mile per gallon costs consumers an estimated $24.1 billion and automakers an estimated $5.5 billion over 10 years, even when accounting for fuel spending. This is because higher fuel efficiency creates high compliance costs that automakers then pass on to buyers. The CAFE program included fines for automakers that failed to comply with increasing standards, but Trump's 2025 One Big Beautiful Bill removed such fines altogether.
Crapo's legislation has five Senate cosponsors, all Republicans, and strong backing from major industry groups, including the American Petroleum Institute. Brent Gardner, the chief government affairs officer for the conservative group Americans for Prosperity, said the legislation would boost affordability and 'ensure consumer choice remains the top driving factor for vehicle purchases'. The bill is not a symbolic one, and its introduction is timed to clear Congress before any shift of control in January.
Under Crapo's bill, automakers would not be subject to fuel economy standards beginning with model year 2029 vehicles. The bill's supporters argue that it would reduce consumer costs and roll back a program that has become a central pillar in Democrats' and activists' climate agenda. However, opponents of the bill are likely to argue that it would increase pollution and harm the environment.
According to Federal Reserve data, following the introduction of CAFE standards in 1975, the average price of new cars rapidly increased. In 1975, the average price of a new car was $4,961, equivalent to roughly $31,799 in 2026 after accounting for inflation. The average price of a new car, however, sits at about $49,758. At the same time, the United States produces far more oil, in 2025, U.S. producers drilled for 4.96 billion barrels of oil, compared with the 3.1 billion barrels of oil produced in 1975.
Crapo said in an interview with the Washington Free Beacon that the higher costs associated with the program and its potential to be weaponized as a climate program were the driving factors behind his decision to move forward with the bill. 'It hasn't meaningfully insulated Americans from volatility in global markets,' Crapo said. 'The oil embargo has ended, but the consistent federal regulatory pressure on the auto industry has continued and increased, which is driving up the cost of automobiles, driving down the choice of options in automobiles and is not saving any dollars significantly to consumers.'
The introduction of the Restoring Affordability in Automobile Manufacturing Act is a significant development in the ongoing debate over fuel economy standards and their impact on American consumers. As the bill makes its way through Congress, it is likely to face significant opposition from Democrats and environmental groups, who argue that the CAFE program is essential for reducing pollution and mitigating the effects of climate change. However, for Republicans and industry groups, the bill represents a crucial step towards reducing regulatory burdens and promoting consumer choice.
The bill's fate will depend on the outcome of the legislative process, which involves several steps. First, the bill will be referred to a committee, where it will be debated and marked up. If the committee approves the bill, it will then be sent to the full Senate for a vote. If the Senate passes the bill, it will then be sent to the House of Representatives, where it will undergo a similar process. If the House passes the bill, it will then be sent to the President's desk, where it can be signed into law or vetoed.
For American readers, the elimination of fuel economy standards could have significant implications. On the one hand, it could lead to lower prices for new vehicles, as automakers would no longer have to comply with expensive fuel efficiency standards. On the other hand, it could also lead to increased pollution and harm to the environment, as vehicles would be allowed to emit more greenhouse gases.
For Canadian readers, the implications of the bill are less direct, but still significant. As a major trading partner with the United States, Canada could be affected by changes in the US auto industry. Additionally, Canada has its own fuel economy standards, which are set by the federal government. If the US were to eliminate its fuel economy standards, it could put pressure on Canada to do the same, which could have significant implications for the environment and the economy.
In conclusion, the introduction of the Restoring Affordability in Automobile Manufacturing Act is a significant development in the ongoing debate over fuel economy standards. While the bill's supporters argue that it would reduce consumer costs and promote consumer choice, its opponents argue that it would increase pollution and harm the environment. As the bill makes its way through Congress, it is likely to face significant opposition, and its fate will depend on the outcome of the legislative process.