President George W. Bush has signed legislation that will bring more fuel-efficient vehicles into auto showrooms and require wider use of ethanol.

During a signing ceremony at the U.S. Energy Department today, Bush called the legislation ``a major step'' toward energy independence and an easing of global warming.

The new law obliges automakers to increase fuel efficiency by 40 per cent to an industry average of 35 miles a U.S. gallon, or 6.7 litres per 100 kilometres, by 2020.

It also ramps up production of ethanol use to 136 billion litres a year by 2022.

Bush said the new requirements will help address U.S. dependency on foreign oil by reducing demand for gasoline and diversifying the nation's fuel supply.