NHTSA Reverses Course on Standalone Engine Fuel Economy Standards for Medium- and Heavy-Duty Vehicles

On August 31, 2026, the National Highway Traffic Safety Administration (NHTSA) published an interpretive rule concluding that it lacks statutory authority to establish standalone fuel economy standards for engines used in certain commercial medium-duty and heavy-duty (MDHD) on-highway vehicles.  The new interpretation reverses an approach NHTSA has followed since 2011 and is the latest step in what the agency has described as an effort to “reset” its federal fuel economy programs.

The interpretive rule—which was issued without public notice and comment—does not itself repeal NHTSA’s existing engine standards or alter regulated parties’ current legal obligations.  Instead, NHTSA states that the rule lays the groundwork for a forthcoming notice-and-comment rulemaking that will reconsider the existing MDHD program.  In the meantime, NHTSA says that it will exercise its enforcement authority consistent with its new interpretation.

Background on the MDHD Program

Congress created the MDHD fuel efficiency program through the Energy Independence and Security Act of 2007 (EISA).  The statute directs NHTSA to establish fuel economy standards for “commercial medium- and heavy-duty on-highway vehicles and work trucks.”  EISA defines commercial medium- and heavy-duty on-highway vehicles as vehicles with a gross vehicle weight rating of 10,000 pounds or more, while “work trucks” generally include certain vehicles rated between 8,500 and 10,000 pounds.

NHTSA first implemented the program in 2011 through a joint rulemaking with the Environmental Protection Agency (EPA), in what was commonly referred to as the Phase 1 rule.  The agencies issued a second joint rulemaking, Phase 2, in 2016.  In both rulemakings, NHTSA established fuel economy standards not only for completed vehicles but also separately for engines used in combination tractors and vocational vehicles.  EPA simultaneously established parallel greenhouse gas emission standards under the Clean Air Act (CAA).  At the time, NHTSA acknowledged that EISA does not expressly mention engines but interpreted its authority broadly.  Among other things, the agency relied on Congress’s direction that it establish “appropriate test methods, measurement metrics, fuel economy standards, and compliance and enforcement protocols” and its authority to prescribe different standards for different classes of vehicles.

NHTSA’s New Interpretation

NHTSA now concludes that its engine regulations go beyond the authority Congress granted it.  The agency’s principal argument is textual: EISA repeatedly directs NHTSA to establish standards for vehicles but does not separately authorize standards for engines or other vehicle components.  NHTSA contrasts EISA with the CAA, which expressly authorizes EPA to regulate both new motor vehicles and new motor vehicle engines.  According to NHTSA, Congress’s use of the word “engines” in the CAA (and its omission from NHTSA’s standards-setting authority) indicates that the two agencies were given different regulatory authority.

NHTSA’s interpretive rule also relies on the Supreme Court’s 2024 decision in Loper Bright Enterprises v. Raimondo.  Following Loper Bright, NHTSA reasons that the relevant question is not whether its previous interpretation of EISA was a permissible one, but what constitutes the statute’s “best reading.”  In NHTSA’s current view, that reading permits standards for MDHD vehicles but not standalone standards for their individual components.

The agency also points to the D.C. Circuit’s 2021 decision in Truck Trailer Manufacturers Association v. EPA, which invalidated NHTSA’s attempt to regulate trailers under the MDHD fuel economy program.  Although that decision involved trailers rather than engines, NHTSA views the decision as supporting a distinction between the authority to regulate vehicles and the authority to regulate individual components that affect vehicle fuel economy.

Notably, the new interpretive rule was not—and still is not—part of the Department of Transportation’s unified regulatory agenda, though its issuance was accompanied by an agency press release.

What Changes Now (and What Does Not)

For the time being, the existing engine standards remain on the books.  NHTSA expressly states that the interpretive rule “does not change existing standards or any rights or obligations under the MDHD program” and does not amend or alter the meaning of its existing regulations.  Instead, the agency stated that it plans to use a separate notice-and-comment rulemaking to formally reset the program.

However, the interpretive rule does indicate a change in NHTSA’s enforcement posture.  Pending its future formal MDHD rulemaking, the agency says it will exercise its enforcement authority over affected standards consistently with its conclusion that it lacks authority to impose standalone engine standards.  Although NHTSA does not explain precisely how it will apply that enforcement discretion in individual cases, the announcement signals relaxed enforcement of the affected engine standards while the formal rulemaking proceeds.

The forthcoming rulemaking could also extend beyond simply deleting the engine standards.  NHTSA states that it will ensure that vehicle manufacturers have “practicable means to comply” with the remaining vehicle standards and will consider whether adjustments to those standards are warranted.  The agency specifically identified the relationship between fuel consumption and potential NOx emission reductions associated with EPA’s model year 2027 heavy-duty NOx standards as one issue under review.

The new interpretation also comes amid broader federal reconsideration of fuel economy and emissions regulation.  In June 2025, NHTSA issued a separate interpretive rule that mainly focused on the agency’s light-duty fuel economy (CAFE) program, but it also questioned other aspects of the MDHD program, including NHTSA’s authority to impose civil penalties and establish a system for trading MDHD compliance credits.  NHTSA has also moved to substantially revise its , and the Secretary of Transportation recently announced that a final CAFE rule is imminent.  And in February 2026, EPA rescinded its greenhouse gas emission standards for motor vehicles and engines after rescinding the 2009 greenhouse gas endangerment finding.

Takeaways

• The engine standards have not disappeared yet. The interpretive rule does not itself repeal any existing regulation or formally eliminate current compliance obligations.  Its most immediate practical consequence is NHTSA’s announced change in enforcement posture while it undertakes a formal rulemaking.  But fuel economy compliance enforcement is typically a multiyear process with various administrative steps, so an interim rule may have limited effect.
• Litigation may follow. NHTSA’s June 2025 interpretive rule was challenged in court, in litigation that has been held in abeyance pending NHTSA’s current CAFE rulemaking.  Similarly, litigation may follow the latest interpretive rule.
• The eventual MDHD rulemaking could be broader than engine standards. NHTSA has signaled that it may revisit vehicle-level standards and other aspects of the program as it works through how a vehicle-only fuel economy regime should operate without separate engine standards.
• The federal regulatory framework for heavy-duty engines and vehicles is undergoing a significant restructuring. NHTSA’s new interpretation follows its June 2025 reconsideration of other aspects of the MDHD program and EPA’s 2026 repeal of federal greenhouse gas standards for vehicles and engines—the latter of which is now subject to litigation.  Engine and vehicle manufacturers should continue to follow these parallel developments closely.
• The forthcoming notice-and-comment process will provide an important opportunity for stakeholders to shape the replacement program. Engine manufacturers, vehicle manufacturers, fleet operators, and other interested parties should consider participating in the upcoming rulemaking, both to address the practical consequences of eliminating standalone engine standards and to ensure that their positions are reflected in the administrative record.

This post is as of the posting date stated above. Sidley Austin LLP assumes no duty to update this post or post about any subsequent developments having a bearing on this post.