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Fuel economy deal pushes average to 54.5 mpg

Automakers and the White House are said to be close to a deal that will set the average fuel efficiency for cars and light trucks through 2025.

The White House and automakers are expected to announce an agreement tomorrow to raise the fuel economy for vehicles, paving the way for a steady increase in mileage ratings.

According to published reports, a compromise has been largely worked out between the White House and automakers to set efficiency standards from 2017 to 2025. The agreement would require mileage to average 54.5 miles per gallon for passenger cars and light trucks by 2025, according to a Washington Post report.

It's a significant step up from the 2016 level where cars and light trucks must average 31.4 miles per gallon or 250 grams per mile of carbon dioxide equivalent. This year, the fuel economy of all 2011 cars and trucks sold has to average out to 27.3 miles per gallon.

The agreement is structured so that each automaker will be given targets that reflect the types of vehicles it sells where very efficiency vehicles will offset gas guzzlers, according to a CNN report. Automakers that sell large trucks and SUVs as well as more efficient compacts and hybrids might have a different target than a company that only sells small cars, the report said.

The corporate average fuel economy (CAFE) standards are structured so that cars will need an average 5 percent improvement each year from 2017 to 2025, while trucks would need to go up 3.5 percent through 2012, according to the CNN report.

The expected compromise falls short of the 60 mpg standard that environmental groups were advocating. But passage would set a national standard and create more certainty for industry in the near term. The deal builds off a landmark agreement that the Obama administration worked out two years ago to create a single national standard, rather than have automakers comply with federal, California, and EPA mandates.

The more stringent standards will create demand for fuel-efficiency technologies, such as hybrids, lighter-weight vehicles, and advanced internal combustion engines. According to a Bloomberg report, the plan includes a credit for relatively inexpensive fuel-saving technologies, such as start-stop hybrids, which turn off their engines when the car is idle.