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Obama Plans New Fuel Limit By 2016

President Barack Obama will announce plans on Tuesday for a national fuel-economy and greenhouse-gas standard for automobiles in an effort to give more certainty to car companies as they struggle for survival, industry and administration sources told POLITICO on Monday.

The administration will bill the tailpipe-emissions announcement as historic, because it avoids a patchwork of standards and has won agreement from so many stakeholders, including automakers, state governments, the Department of Transportation and the Environmental Protection Agency.

The national emissions policy for autos, which will ramp up to a new mileage-per-gallon standard in 2016, will harmonize the CAFE standard and the EPA's greenhouse-gas standard, so that industry will not have to worry that the administration will regulate those on separate tracks.

California had been seeking permission to establish its own greenhouse-gas reduction standard for tailpipe emissions, but now can be expected to ultimately accept the federal standard.

In secret conversations, the Obama administration has lined up support from many state governments and a huge array of domestic and foreign automakers, including GM, Ford, Chrysler, BMW and many more. 

Auto executives are flying into Washington from around the world for the White House announcement.

California Gov. Arnold Schwarzenegger, a Republican, is expected to attend, the sources said.

The Corporate Average Fuel Economy standard was established by Congress in 1975 in response to the Arab Oil embargo.

On Obama’s seventh day in office, he directed his Transportation Department to establish higher fuel efficiency standards for carmakers' 2011 model year “so that we use less oil and families have access to cleaner, more efficient cars and trucks.”

“This rule will be a down payment on a broader and sustained effort to reduce our dependence on foreign oil,” he said. “Going forward, my administration will work on a bipartisan basis in Washington and with industry partners across the country to forge a comprehensive approach that makes our economy stronger and our nation more secure.”

This announcement implements a uniform standard for a later date.