The notice of intent (NOI) proposes increasing fuel economy by between 3 and 6 percent per year. Such an increase could bring fuel economy to as much as 62 miles per gallon by 2025, according to Reuters.

The proposal is a response to a May 21, 2010, presidential memorandum instructing the federal agencies to increase fuel economy in passenger cars and light-duty trucks made in those years. The agencies had previously put forth a proposal to increase fuel economy in the vehicles to 35.5 miles per gallon by 2016.

But the plan is not yet set in stone and likely won’t be finalized until 2012.

Sens. Dianne Feinstein (D-Calif.), Susan Collins (R-Maine) and Chuck Schumer (D-N.Y.) co-sponsored a measure today that would modestly increase the “clunker” requirement of the program and significantly raise the fuel-efficiency mandates.

The House measure would give a $3,500 voucher to a driver who trades in a car that gets 18 miles per gallon or less for one that gets at least 4 mpg more. The Senate proposal, on the other hand, sets the upper limit for the clunker at 17 mpg and requires that the new vehicle get at least 24 mpg. It would set a sliding scale, whereby a trade-in that achieves a 7-mpg improvement would earn a driver $2,500, while a 10-mpg gain would yield $3,500 and a 13-mpg increase would garner $4,500.

And while drivers could receive a voucher for a 1-mpg improvement in their trucks under the House plan, the minimum under the Senate proposal is 3 mpg.

“The ‘Cash for Clunkers’ proposal that I’m putting forward with Senators Collins and Schumer would place a greater emphasis on fuel economy improvements than the House compromise — which could allow for the scrapping of perfectly adequate vehicles in return for federal incentives to purchase gas-guzzling vehicles,” Feinstein wrote in a press release. “That’s unacceptable. Our proposal, on the other hand, would achieve between 32 to 38 percent greater oil savings, save drivers 176 gallons of gasoline per year, and cut greater greenhouse gas emissions by 32 percent more than the House compromise. In short, this would accomplish the dual goals of stimulating car sales and requiring more efficient vehicles. We believe this is a much better deal for American taxpayers.”

Ordinarily, I’d say that such an ambitious proposal would have little chance of passing, but with bipartisan sponsorship, it could actually shift the debate. The differences between the House and Senate measures will likely be reconciled in conference — that is, if the Senate is able to pass its version of the Waxman-Markey bill several months down the road. And as anyone who’s kept an eye on Washington recently can tell you, that’s a big if.

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But now fuel efficiency appears to be due for another boost. InsideEPA reports that the administration is working out a compromise with the state of California that would federalize California’s more stringent guidelines. In return, California would adopt a national system, favored by automakers, for calculating fuel efficiency requirements.

From InsideEPA:

Several sources say EPA is likely to follow historical precedent and federalize the state rules, as part of the agency’s reconsideration of the Bush administration’s denial of the state’s waiver request, which blocked the state from implementing its GHG standards that more than a dozen other states have already adopted.

But the administration appears to be acting in line with automakers’ calls for a single national standard by coordinating overlapping EPA and Department of Transportation (DOT) regulatory processes, both of which are responses to legal pressure for stringent vehicle standards that reduce GHG emissions. The moves also appear set to be issued imminently, as EPA faces deadlines to propose new rules to meet its legal mandates.

A major issue, however, is whether California will agree to modify its rules to create a pathway for automakers to meet its standard through a federally applied attribute-based system for calculating the fuel efficiency requirements or by an EPA-backed emissions standard. California’s GHG rules currently use the class-based, fleet-wide average calculation, but federal rules would likely use the attribute-based calculation to avoid the patchwork of standards that industry opposes.

Sources closely following the issue now say the state may be willing to accept such a compromise, which automakers are calling for and that would allow EPA to nationalize the state rules.