U.S. car manufacturers will receive a loan to produce more fuel-efficient, lower emissions vehicles.
The U.S. Department of Energy issued an Interim Final Rule last week for the Advanced Technology Vehicles Manufacturing Loan Program, which will distribute up to $25 billion in direct loans to automakers and component manufacturers. The loans will help those manufacturers establish new U.S. manufacturing facilities or re-equip or expand existing ones within the United States for the production of advanced technology vehicles and the components for such vehicles.
To expedite the loans, the rule will become effective as soon as it is published in the Federal Register, but DOE will also accept comments on the rule for 30 days after its publication. The loan program was authorized by section 136 of the Energy Independence and Security Act of 2007, which President Bush signed into law in December 2007. To qualify for the loan, the vehicles being manufactured must meet tough emissions standards while achieving a 25 percent greater fuel economy than similar vehicles sold in Model Year 2005.
Congress appropriated $7.5 billion in late September to cover the subsidy cost of the loans, and the actual amount of loans available will depend on the financial circumstances of the borrowers and the specifics of their proposed projects. Each manufacturer must be financially viable to receive a loan. And although DOE intends to expedite the loans, the agency must comply with all statutory requirements, including the National Environmental Policy Act. DOE expects to issue the loans in several rounds, with a new round every three months. Applications for the first round of funding are due on Dec. 31. See the DOE press release and fact sheet on the loan program, the loan program Web site, and the full text of DOE's interim final rule.
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