Engineers all over the world are trying to invent new technologies for designing fuel efficient cars. Both fuel efficiency and emissions rely heavily on the performance of the engine, therefore, designing better engines seems the best way to go about it. Technologies like Variable Valve Timing, Cylinder Deactivation, Turbocharging and Supercharging, Start/Stop , and advanced transmission technologies are some of the recent and advanced topics that are being exploited and have already started contributing to better performing cars. While all such advancements are admirable and gratifying, design engineers do not seem to have any respite.
EPA regulations for automotive emission standards help keep an eye on harmful gaseous emissions from filling up and polluting our environment. Every year, our population grows and our cities are getting bigger, which means more people with cars driving longer distances. This leads to increased emissions and fuel usage. Therefore, US EPA (US Environmental Protection Agency) has to change their regulations based on current statistical data periodically. Since cars have to meet these standards before they can be sold, they have become progressively clean, and fuel efficient over the years. However, this makes it harder for design engineers to design engine for vehicles and they face engineering challenges that pile up every year. In addition, it is a big issue for car companies because they have to produce efficient cars which means they have to invest in and invent new technologies, not really a cheap option for them especially when the regulations are becoming more stringent every year.
Just to give you an idea, the chart in figure 1 given below shows how the emission standards for NOX (oxides of nitrogen) and PM (particulate matter) have changed over the last few decades for diesel engines.  The smaller the box, the more strict the emission regulations are. It is clear that the requirements have increased exponentially. For instance, the NOX regulations have gone up from 1988 to 2007 by about 100 times.
Figure 1: Heavy duty diesel emissions standards since 1988 
In addition, figure 2 displays how the corporate fuel economy standards which are required by the Energy Policy and Conservation Act of 1975, have changed over the years.  The Corporate Average Fuel Economy (CAFE) is the harmonic mean fuel economy in miles per gallons(US), of all the cars or light trucks produced by a manufacturer in a year.  Similar to emission regulations, CAFE standards are set in order to improve the fuel economy of the vehicles being sold in US. If the average fuel economy falls short of the standards, the company has to pay a penalty accordingly. As shown in the table, it is predicted that CAFE for each automotive company in 2025 will have to meet a standard of 54.5 mpg. Looking at our history and how car companies have kept up with these standards, it can be said that it is a surmountable task, nonetheless, challenging.
Figure 2: US CAFE standards (in mpg) 
There is no need to panic though. While EPA sets these strict regulations, its aim is to protect the environment. Therefore, it is actively involved in finding ways and helping engineers and car companies meet such regulations. For example, EPA’s SmartWay is a collaboration between the EPA and the freight transportation that helps improve fuel economy and save money.  EPA also provides competitive funding for programs and projects related to air quality , transportation, climate change, indoor air and other related topics.  There is definitely a constant need for research and development. It will be interesting to see how the regulations change and if our technology is able to meet those standards or not.
4. Internal Combustion Engines and Automotive Engineering by Ronald Matthews, 2011