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    Saturday, May 04, 2024

    Obama fuel-economy rule gives boost to Honda natural gas cars

    Washington - Honda, which last year complained that a proposed fuel-economy rule was unfair to non- U.S. automakers, got a boost when the final version added extra credits for sellers of natural gas-powered vehicles.

    Honda, based in Tokyo, is the only automaker selling compressed natural gas-powered cars to U.S. drivers and can use the credits to meet the fuel-economy standards. It's one of the few changes made to a rule for 2017 to 2025 that was proposed in November 2011 and released in final form Tuesday by President administration.

    "Providing incentive credits for natural gas vehicles makes a great deal of sense under this regulation," Edward Cohen, Honda vice president of government and industry relations, said in an email Tuesday. "A dedicated natural gas vehicle reduces CO2 emissions by 25 percent and petroleum consumption by 100 percent."

    The corporate average fuel economy, or CAFE, rule may cost the auto industry as much $136 billion to comply with, while saving consumers up to $451 billion in fuel costs, regulators from the Environmental Protection Agency and National Highway Traffic Safety Administration said in a briefing. They declined to be named because they weren't authorized to be quoted about the rule.

    "With this added incentive from the government, Toyota, GM and other carmakers may follow and introduce cars that run on natural gas," said Mitsushige Akino, who oversees about $500 million in assets at Tokyo-based Ichiyoshi Investment Management. "The market isn't established yet, so it may not directly lead to a boost in sales, but being a leader may boost Honda's share price."

    The rule compels automakers to double the average fuel economy of passenger vehicles sold in the United States by 2025, through gradual increases in the rates at which they must improve mileage and reduce greenhouse gas emissions.

    Honda, Japan's third-largest carmaker, signed on to the rule's framework after complaining in an e-mail that the plan, containing extra credits for hybrid pickup trucks made by U.S.-based automakers, "communicates favoritism and an unfair playing field to all market participants."

    Obama's administration and most global automakers agreed on the framework in July 2011 after private negotiations that Rep. Darrell Issa, R-Calif., has characterized as improper.

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