Today, the Department of Transportation is expected to announce a more aggressive timetable for fuel economy increases: automakers will be required to raise average fuel efficiency to 31.5 miles per gallon by 2015. The fleet’s overall average in the 2007 model year was 26.7 mpg.

In December, Congress approved an increase of Corporate Average Fuel Efficiency (CAFE) to 35 miles per gallon by the year 2020, leaving it to the Bush administration to decide how fast to implement the increases.

The announcement comes on Earth Day, and one day after AAA reported that Americans are paying an average of more than $3.50 per gallon for gasoline for the first time. The Bush Administration and the auto industry are under pressure to respond to public anger about high gas prices, and to deflect proposals from California and 16 other states that call for fuel economy to reach more than 43 miles per gallon by 2016.

The effectiveness of the new Department of Transportation proposal depends on many details, and potential loopholes, in the plan:

  • The plan is not finalized. The public and automakers will have a chance to comment on the plan before it becomes final.
  • The proposal creates credit trading and transfers, which allow automakers to apply credits earned from passenger cars exceeding mpg targets—to light trucks and SUVs. Automakers that continue to produce gas-guzzlers can buy credits from more efficient automakers.
  • Instead of one overall number, the proposal uses size, or other attributes of the car, to set fuel economy numbers. It’s not clear how the attributes will be defined.

If finalized, the proposed increases and new time table will intensify the auto industry’s shift to smaller, less powerful engines, as well as hybrid gas-electric vehicles and diesels.