The Department of Transportation has announced the new 2011 Corporate Average Fuel Efficiency (CAFE) rule and has pegged it at 30.2 mpg which is less than the current CAFE standard of 31.4 mpg for the average vehicle in a corporate car fleet. There is an increase of 2mpg over the 2010 standard for combined corporate and private vehicles but the real news under the froth is that this only represents a very meager 1% increase on the 2008 standards already achieved last year.

In short, the US government is not exactly raising the bar when it comes to environmental standards!

The green lobby has been bitterly disappointed by the ruling announcement but many observers have been questioning the real reason behind all of this – it certainly is sending a very different signal than that delivered earlier on in the year by President Obama when giving speech after speech on green and environmental issues.

One of the major motivators appears to be the current economic crisis and a desire not to impose any further costs on auto makers to achieve the CAFE standards. By setting the CAFE standard at a level that is already being achieved it relieves the burden off of the major car manufacturers and especially at a time when GM is in merger/takeover talks with Italy’s Fiat car giant and the financial issues surrounding the future of Chrysler are even more delicate.

This still leaves the bill which President Bush signed mandating an average of 35 mpg for cars and trucks by the year 2020 and which was signed into law in 2007 however, the dates and milestones as to how this was to be achieved were left blank for the 2011 phase in transitional period. The buck has been firmly passed on this one to the Obama administration and now they only have until April 1st to determine the rule itself – almost an impossibility and serious argument for throwing this in the trash and starting again with something more workable, especially in view of the economic impact on the industry.