---
kind: "section"
citation: "49 U.S.C. § 32903"
title: "49"
title_heading: "Transportation"
number: "32903"
heading: "Credits for exceeding average fuel economy standards"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/49/32903"
units:
  - "Subtitle VI — Motor Vehicle and Driver Programs"
  - "Part C — Information, Standards, and Requirements"
  - "Chapter 329 — Automobile Fuel Economy"
---

# §32903. Credits for exceeding average fuel economy standards

- (a) **Earning and Period for Applying Credits.—** When the [average fuel economy](/usc/49/32901.md?p=a-5) of [passenger automobiles](/usc/49/32901.md?p=a-18) manufactured by a [manufacturer](/usc/49/30102.md?p=a-6) in a particular [model](/usc/49/32901.md?p=a-15) year exceeds an applicable [average fuel economy standard](/usc/49/32901.md?p=a-6) under subsections [(a)](/usc/49/32902.md?p=a) through [(d)](/usc/49/32902.md?p=d) of section 32902 (determined by the Secretary of Transportation without regard to credits under this section), the [manufacturer](/usc/49/30102.md?p=a-6) earns credits. The credits may be applied to—
  - (1) any of the 3 consecutive [model](/usc/49/32901.md?p=a-15) years immediately before the [model](/usc/49/32901.md?p=a-15) year for which the credits are earned; and
  - (2) to the extent not used under [paragraph (1)](#a-1)[^1] any of the 5 consecutive [model](/usc/49/32901.md?p=a-15) years immediately after the [model](/usc/49/32901.md?p=a-15) year for which the credits are earned.
- (b) **Period of Availability and Plan for Future Credits.—**
  - (1) Except as provided in paragraph (2) of this subsection, credits under this section are available to a [manufacturer](/usc/49/30102.md?p=a-6) at the end of the [model](/usc/49/32901.md?p=a-15) year in which earned.
  - (2)
    - (A) Before the end of a [model](/usc/49/32901.md?p=a-15) year, if a [manufacturer](/usc/49/30102.md?p=a-6) has reason to believe that its [average fuel economy](/usc/49/32901.md?p=a-5) for [passenger automobiles](/usc/49/32901.md?p=a-18) will be less than the applicable standard for that [model](/usc/49/32901.md?p=a-15) year, the [manufacturer](/usc/49/30102.md?p=a-6) may submit a plan to the Secretary of Transportation demonstrating that the [manufacturer](/usc/49/30102.md?p=a-6) will earn sufficient credits under this section within the next 3 [model](/usc/49/32901.md?p=a-15) years to allow the [manufacturer](/usc/49/30102.md?p=a-6) to meet that standard for the [model](/usc/49/32901.md?p=a-15) year involved. Unless the Secretary finds that the [manufacturer](/usc/49/30102.md?p=a-6) is unlikely to earn sufficient credits under the plan, the Secretary shall approve the plan. Those credits are available for the [model](/usc/49/32901.md?p=a-15) year involved if—
      - (i) the Secretary approves the plan; and
      - (ii) the [manufacturer](/usc/49/30102.md?p=a-6) earns those credits as provided by the plan.
    - (B) If the [average fuel economy](/usc/49/32901.md?p=a-5) of a [manufacturer](/usc/49/30102.md?p=a-6) is less than the applicable standard under subsections [(a)](/usc/49/32902.md?p=a) through [(d)](/usc/49/32902.md?p=d) of section 32902 after applying credits under [subsection (a)(1)](#a-1) of this section, the Secretary of Transportation shall notify the [manufacturer](/usc/49/30102.md?p=a-6) and give the [manufacturer](/usc/49/30102.md?p=a-6) a reasonable time (of at least 60 days) to submit a plan.
- (c) **Determining Number of Credits.—** The number of credits a [manufacturer](/usc/49/30102.md?p=a-6) earns under this section equals the product of—
  - (1) the number of tenths of a mile a gallon by which the [average fuel economy](/usc/49/32901.md?p=a-5) of the [passenger automobiles](/usc/49/32901.md?p=a-18) manufactured by the [manufacturer](/usc/49/30102.md?p=a-6) in the [model](/usc/49/32901.md?p=a-15) year in which the credits are earned exceeds the applicable [average fuel economy standard](/usc/49/32901.md?p=a-6) under subsections [(a)](/usc/49/32902.md?p=a) through [(d)](/usc/49/32902.md?p=d) of section 32902; times
  - (2) the number of [passenger automobiles](/usc/49/32901.md?p=a-18) manufactured by the [manufacturer](/usc/49/30102.md?p=a-6) during that [model](/usc/49/32901.md?p=a-15) year.
- (d) **Applying Credits for Passenger Automobiles.—** The Secretary of Transportation shall apply credits to a [model](/usc/49/32901.md?p=a-15) year on the basis of the number of tenths of a mile a gallon by which the [manufacturer](/usc/49/30102.md?p=a-6) involved was below the applicable [average fuel economy standard](/usc/49/32901.md?p=a-6) for that [model](/usc/49/32901.md?p=a-15) year and the number of [passenger automobiles](/usc/49/32901.md?p=a-18) manufactured that [model](/usc/49/32901.md?p=a-15) year by the [manufacturer](/usc/49/30102.md?p=a-6). Credits applied to a [model](/usc/49/32901.md?p=a-15) year are no longer available for another [model](/usc/49/32901.md?p=a-15) year. Before applying credits, the Secretary shall give the [manufacturer](/usc/49/30102.md?p=a-6) written notice and reasonable opportunity to comment.
- (e) **Applying Credits for Non-Passenger Automobiles.—** Credits for a [manufacturer](/usc/49/30102.md?p=a-6) of automobiles that are not [passenger automobiles](/usc/49/32901.md?p=a-18) are earned and applied to a [model](/usc/49/32901.md?p=a-15) year in which the [average fuel economy](/usc/49/32901.md?p=a-5) of that class of automobiles is below the applicable [average fuel economy standard](/usc/49/32901.md?p=a-6) under [section 32902(a) of this title](/usc/49/32902.md?p=a), to the same extent and in the same way as provided in this section for [passenger automobiles](/usc/49/32901.md?p=a-18).
- (f) **Credit Trading Among Manufacturers.—**
  - (1) **In general.—** The Secretary of Transportation may establish, by regulation, a [fuel economy](/usc/49/32901.md?p=a-11) credit trading program to allow [manufacturers](/usc/49/30102.md?p=a-6) whose automobiles exceed the [average fuel economy standards](/usc/49/32901.md?p=a-6) prescribed under [section 32902](/usc/49/32902.md) to earn credits to be sold to [manufacturers](/usc/49/30102.md?p=a-6) whose automobiles fail to achieve the prescribed standards such that the total oil savings associated with [manufacturers](/usc/49/30102.md?p=a-6) that exceed the prescribed standards are preserved when trading credits to [manufacturers](/usc/49/30102.md?p=a-6) that fail to achieve the prescribed standards.
  - (2) **Limitation.—** The trading of credits by a [manufacturer](/usc/49/30102.md?p=a-6) to the category of [passenger automobiles](/usc/49/32901.md?p=a-18) manufactured domestically is limited to the extent that the [fuel economy](/usc/49/32901.md?p=a-11) level of such automobiles shall comply with the requirements of [section 32902(b)(4)](/usc/49/32902.md?p=b-4), without regard to any trading of credits from other [manufacturers](/usc/49/30102.md?p=a-6).
- (g) **Credit Transferring Within a Manufacturer’s Fleet.—**
  - (1) **In general.—** The Secretary of Transportation shall establish by regulation a [fuel economy](/usc/49/32901.md?p=a-11) credit transferring program to allow any [manufacturer](/usc/49/30102.md?p=a-6) whose automobiles exceed any of the [average fuel economy standards](/usc/49/32901.md?p=a-6) prescribed under [section 32902](/usc/49/32902.md) to [transfer](/usc/49/32702.md?p=8) the credits earned under this section and to apply such credits within that [manufacturer](/usc/49/30102.md?p=a-6)’s fleet to a compliance category of automobiles that fails to achieve the prescribed standards.
  - (2) **Years for which used.—** Credits transferred under this subsection are available to be used in the same [model](/usc/49/32901.md?p=a-15) years that the [manufacturer](/usc/49/30102.md?p=a-6) could have applied such credits under subsections [(a)](#a), [(b)](#b), [(d)](#d), and [(e)](#e), as well as for the [model](/usc/49/32901.md?p=a-15) year in which the [manufacturer](/usc/49/30102.md?p=a-6) earned such credits.
  - (3) **Maximum increase.—** The maximum increase in any compliance category attributable to transferred credits is—
    - (A) for [model](/usc/49/32901.md?p=a-15) years 2011 through 2013, 1.0 mile per gallon;
    - (B) for [model](/usc/49/32901.md?p=a-15) years 2014 through 2017, 1.5 miles per gallon; and
    - (C) for [model](/usc/49/32901.md?p=a-15) year 2018 and subsequent [model](/usc/49/32901.md?p=a-15) years, 2.0 miles per gallon.
  - (4) **Limitation.—** The [transfer](/usc/49/32702.md?p=8) of credits by a [manufacturer](/usc/49/30102.md?p=a-6) to the category of [passenger automobiles](/usc/49/32901.md?p=a-18) manufactured domestically is limited to the extent that the [fuel economy](/usc/49/32901.md?p=a-11) level of such automobiles shall comply with the requirements under [section 32904(b)(4)](/usc/49/32904.md?p=b-4), without regard to any [transfer](/usc/49/32702.md?p=8) of credits from other categories of automobiles described in [paragraph (6)(B)](#g-6-B).
  - (5) **Years available.—** A credit may be transferred under this subsection only if it is earned after [model](/usc/49/32901.md?p=a-15) year 2010.
  - (6) **Definitions.—** In this subsection:
    - (A) **Fleet.—** The term “fleet” means all automobiles manufactured by a [manufacturer](/usc/49/30102.md?p=a-6) in a particular [model](/usc/49/32901.md?p=a-15) year.
    - (B) **Compliance category of automobiles.—** The term “compliance category of automobiles” means any of the following 3 categories of automobiles for which compliance is separately calculated under this chapter:
      - (i) [Passenger automobiles](/usc/49/32901.md?p=a-18) manufactured domestically.
      - (ii) [Passenger automobiles](/usc/49/32901.md?p=a-18) not manufactured domestically.
      - (iii) [Non-passenger automobiles](/usc/49/32901.md?p=a-17).
- (h) **Refund of Collected Penalty.—** When a civil penalty has been collected under this chapter from a [manufacturer](/usc/49/30102.md?p=a-6) that has earned credits under this section, the Secretary of the Treasury shall refund to the [manufacturer](/usc/49/30102.md?p=a-6) the amount of the penalty to the extent the penalty is attributable to credits available under this section.

## Footnotes

[^1]: So in original. Probably should be followed by a comma.

## Source credit

(Pub. L. 103–272, § 1(e), July 5, 1994, 108 Stat. 1061; Pub. L. 110–140, title I, § 104(a), Dec. 19, 2007, 121 Stat. 1501.)

## Notes

| Historical and Revision Notes |  |  |
| --- | --- | --- |
| Revised<br>Section | Source (U.S. Code) | Source (Statutes at Large) |
| 32903(a) | 15:2002(l)(1)(B), (4). | Oct. 20, 1972, Pub. L. 92–513, 86 Stat. 947, § 502(l); added Oct. 10, 1980, Pub. L. 96–425, § 6(b), 94 Stat. 1826. |
| 32903(b)(1) | 15:2002(l)(1)(A). |  |
| 32903(b)(2) | 15:2002(l)(1)(C). |  |
| 32903(c) | 15:2002(l)(1)(D). |  |
| 32903(d) | 15:2002(l)(1)(E). |  |
| 32903(e) | 15:2002(l)(2). |  |
| 32903(f) | 15:2002(l)(3). |  |

In this section, various forms of the words “apply credits” are substituted for various forms of “credits are available to be taken into account” to be more concise and to make more clear the distinction between when credits are available and to what years they may be applied.

In subsection (a), before clause (1), the text of 15:2002(l)(4) is omitted as surplus because of 49:322(a). The words “any adjustment under subsection (d) of this section” are omitted because 15:2002(d) is omitted from the revised title as executed. The words “calculated under subparagraph (C)” (which apparently should be “calculated under subparagraph (D)”) are omitted as surplus. In clauses (1) and (2), the words “with respect to the average fuel economy of that manufacturer” are omitted as surplus. The words “year for which the credits are earned” are substituted for “year in which such manufacturer exceeds such applicable average fuel economy standard” to eliminate unnecessary words.

Subsection (b)(1) is substituted for 15:2002(l)(1)(A) to eliminate unnecessary words.

In subsection (b)(2)(A) is substituted for 15:2002(l)(1)(C)(i)–(iii) to eliminate unnecessary words.

In subsection (e), the words “as provided in this section for passenger automobiles” are substituted for “as provided for under paragraph (1)” for clarity. The text of 15:2002(l)(2) (last sentence) is omitted as expired.

### Editorial Notes

### Amendments

2007—Subsec. (a). Pub. L. 110–140, § 104(a)(1), substituted “subsections (a) through (d) of section 32902” for “section 32902(b)–(d) of this title” in introductory provisions.

Subsec. (a)(2). Pub. L. 110–140, § 104(a)(2), substituted “paragraph (1)” for “clause (1) of this subsection,” and “5 consecutive” for “3 consecutive”.

Subsecs. (b)(2)(B), (c)(1). Pub. L. 110–140, § 104(a)(1), substituted “subsections (a) through (d) of section 32902” for “section 32902(b)–(d) of this title”.

Subsecs. (f) to (h). Pub. L. 110–140, § 104(a)(3), (4), added subsecs. (f) and (g) and redesignated former subsec. (f) as (h).

### Statutory Notes and Related Subsidiaries

### Effective Date of 2007 Amendment

Amendment by Pub. L. 110–140 effective on the date that is 1 day after Dec. 19, 2007, see section 1601 of Pub. L. 110–140, set out as an Effective Date note under section 1824 of Title 2, The Congress.