President Barack Obama will announce on Tuesday a proposal for the most aggressive increase in US auto fuel efficiency to date, which will also include direct regulation of emissions for the first time and resolve a dispute with California over cleaner cars. The plan will require a 10-mile-per-gallon increase in average fuel standards for all new passenger vehicles between 2012-16, resulting in a 35.5 miles per gallon standard. This initiative is expected to reduce climate-warming carbon emissions by 900 million metric tons over the program's lifespan, and save 1.8 billion barrels of oil. Major automakers, including General Motors Corp and Toyota Motor Corp, support the plan. In a statement, GM CEO Fritz Henderson expressed that GM and the auto industry will benefit from having more consistency and certainty to guide their product plans. Toyota Motor Sales USA President James Lentz also stated that the single national standard will improve vehicle choices for consumers. The new program, as per the administration, will increase the cost of producing a vehicle by about $600 compared to the current law, which mandates automakers to achieve a fleet average of 35 mpg by 2020, a 40 percent increase from current levels. US auto companies had resisted significant fuel standard increases for many years until Congress and the Bush administration agreed to stricter targets in 2007. Some vehicles, mainly produced by foreign manufacturers, already meet or surpass the upcoming proposed standards. California had previously sought permission to set its own regulations for reducing auto emissions, but the Bush administration and auto companies opposed this idea. However, California has now agreed to follow the proposed national standard if it is approved. Senator Barbara Boxer sees this as a positive development in the fight against global warming and reducing U.S. reliance on imported oil. The 30 percent reduction in emissions is more aggressive than what California and other states have been seeking. In April, the administration declared climate-warming pollution a danger to human health and welfare, a significant change from the Bush administration's policies. The new policy would allow automakers flexibility in meeting standards and would consider the environmental impact of carbon-based fuels and other vehicle systems that emit emissions, such as air conditioners. David Friedman, research director of the clean vehicle program at the Union of Concerned Scientists, expressed optimism about the potential impact of this policy on clean cars. The plan is based on the assumption that gas prices will average $3.50 per gallon by 2016, with the hope of encouraging consumers to choose more fuel-efficient vehicles. Automakers are actively working on improving hybrids and electric cars, but the recent decrease in gas prices due to a drop in demand caused by the recession has led to increased sales of less efficient pickups and SUVs. To boost sales and improve fuel efficiency, Congress is considering a bill that would provide consumers with up to $4,500 to trade in older, less fuel-efficient vehicles for more efficient ones. Additionally, a key committee in the US Congress has started a week-long climate change debate, with Democrats pushing for a bill to combat global warming and Republicans opposing a part of the plan they believe will harm the economy.