News

November 16, 2011

EPA and NHTSA Include Credit Trading Provision in the Joint Rulemaking to Establish GHG and CAFÉ Standards for 2017-2025 Model Year Light Duty Vehicles.

In the notice of proposed rulemaking issued November 16, 2011, EPA has proposed standards that are projected to require, on an average industry fleet wide basis, 163 grams/mile of carbon dioxide (CO2) in model year 2025, which is equivalent to 54.5 mpg if this level were achieved solely through improvements in fuel efficiency.  Separately, NHTSA has proposed passenger car and light truck standards for MYs 2017–2025 in two phases. The first phase, from MYs 2017–2021, includes proposed standards that are projected to require, on an average industry fleet wide basis, 40.9 mpg in MY 2021. The second phase of the CAFE program, from MYs 2022–2025, represents conditional proposed standards that are projected to require, on an average industry fleet wide basis, 49.6 mpg in model year 2025.  As in the MY 2011 CAFE program under EPCA/EISA, and also in MYs 2012–2016 for the light-duty vehicle GHG and CAFÉ program, EPA and NHTSA have proposing that a manufacturer whose fleet generates credits in a given model year would have several options for using those credits, including credit carryback, credit carry-forward, credit transfers, and credit trading.  EPA and NHTSA expect to finalize the proposed requirements by August of 2012.  For more information, see the EPA and NHTSA websites for this rulemaking.

 

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Our easy-to-use online trading platform makes it possible for automakers, engine manufacturers, fuels producers, and fleet operators to buy and sell regulatory compliance credits via forward auctions and reverse auctions.
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In a Forward Auction, a company with excess credits initiates an auction to sell credits and companies needing credits bid to buy them. As the auction proceeds, bidding drives up the price of the credits. When the auction ends, the company that has offered to pay the most for the credits is the winner.

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In a Reverse Auction, a company needing credits initiates an auction to purchase credits and companies with excess credits bid to sell their credits to that company. As the auction proceeds, bidding drives the price of the credits down. When the auction ends, the company that has offered to sell their credits for the least amount of money is the winner.

See An Example