U.S. President Barack Obama
took aim at climate-warming greenhouse gases on Tuesday and obliged the
struggling auto industry to make more efficient cars by imposing tough
national standards to cut emissions and increase gas mileage.

Obama said the new standards, announced at a White House ceremony
attended by auto industry and union leaders, would reduce U.S.
dependence on foreign oil and give five years of cost certainty to an
auto industry battling to survive.

The status quo is no longer acceptable, Obama said in an
announcement that raised pressure on carmakers to transform and
modernize the industry to produce more efficient vehicles.

We have done little to increase fuel efficiency of America's cars
and trucks for decades, he said, calling the standards the start of a
transition to a clean energy economy.

Obama has made fighting climate change a priority for his
administration, and lawmakers from his Democratic party are this week
wrangling over a historic bill many hope will provide much broader
guidelines for controlling greenhouse gas emissions.

Under the new vehicle standards, U.S. passenger vehicles and light
trucks must average 35.5 miles per gallon (6.62 litres/100km) by 2016,
which Obama said would save 1.8 billion barrels of oil over the
lifetime of the program.

The Environmental Protection Agency would regulate tailpipe emissions for the first time under the standards.

The U.S. Congress does not have to approve the standards, which will be implemented through federal rules.


The plan was praised by automakers and environmentalists but means
higher price tags for consumers. Officials said they would recoup the
money with lower fuel costs.

The new program, the administration said, will add about $600 to the
price of producing a vehicle compared to current law. This requires
automakers to achieve a fleet average of 35 mpg by 2020, a 40 percent
increase over today's performance.

The plan could cut deeply into voracious U.S. gasoline demand,
dealing another blow to a refining sector hard hit by recession and
bracing for more climate legislation.

The White House announcement came as U.S. gasoline prices soared for
the second week in a row, with the latest pump cost up 7 cents over the
previous week to $2.31 a gallon amid signs of an easing of the

Obama was flanked at the ceremony by executives from 10 automakers,
labor leaders and Michigan Gov. Jennifer Granholm, who embraced the
plan for giving the struggling industry cost certainty by setting a
uniform national standard.

At a time of historic crisis in our auto industry, this rule
provides the clear certainty that will allow these companies to plan
for a future in which they are building the cars of the 21st century,
Obama said.

The compromise also resolves a long-running dispute between the
government and California, which had been seeking a waiver from federal
law to impose its own tough standards on emissions.

Obama said a series of lawsuits tied to California's efforts would
be dropped. California Gov. Arnold Schwarzenegger attended the White
House announcement in a show of support.

The proposal is aimed at cutting climate-warming carbon emissions,
which would fall by 900 million metric tons or more than 30 percent
over the life of the program, officials said.