WASHINGTON (MarketWatch) -- Senators on Thursday agreed to a compromise on fuel-efficiency standards that would require automobiles to average 35 miles per gallon by 2020, the first major boost in mileage requirements in decades.

Under current corporate average fuel-economy regulations, or CAFE standards, each automaker's fleet must average 27.5 miles a gallon for cars and 22.5 miles a gallon for light trucks for model-year 2008.

The agreement preserves the bill's original call to increase CAFE standards to 35 miles per gallon by 2020. But it drops a requirement that automakers boost mileage an additional 4% a year after 2020.

Senators unveiled the bill in a Capitol Hill news conference Thursday afternoon. The amendment was then quickly added to the comprehensive energy bill under debate on the Senate floor without a roll call vote.
It marks a setback for Detroit's Big 3 automakers, which had backed a proposal by Sens. Carl Levin and Debbie Stabenow, Michigan Democrats, which would have maintained lower standards for pickups and sport-utility vehicles.

"I was wanting to keep light trucks separate, but when we saw how this curve would work and talked to some of the experts on it, I think this is the best way to get where we want to go," said Sen. Ted Stevens, R-Alaska, who helped write the compromise.