Automakers, California reach deal on emissions
DETROIT — Four major automakers have reached a deal with California to toughen standards for gas mileage and greenhouse gas emissions, bypassing the Trump administration’s push to relax mileage standards nationwide instead.
Ford, BMW, Honda and Volkswagen signed the deal with the California Air Resources Board, the state’s air pollution regulator, which has been at odds with the Trump administration for months, in a contest that automakers fear could set up years of confusion and litigation in the industry. California has said it would exercise its powers to set more stringent pollution and mileage standards than the federal government has proposed.
The administration reacted strongly to the end run, with Environmental Protection Agency spokesman Michael Abboud calling it a “PR stunt.”
“The federal government, not a single state, should set this standard,” White House spokesman Judd Deere said. The administration would keep going on its competing effort to relax mileage standards nationwide, Deere said.
The administration has sought to freeze Obama administration standards, keeping fleetwide newvehicle mileage at 2021 levels of about 30 mpg. The administration says the extra expense to comply with the requirements will raise the price of new cars, making them unaffordable and depriving buyers of new safety technology. Many experts, including former EPA engineers, challenge the administration’s argument.
The administration also has threatened to challenge California’s ability to set its own standards.
In a statement Thursday, California regulators said their deal delays by one year the new-vehicle fuel efficiency requirements approved under the Obama administration for model years 2022 through 2025. That means the fleet of new vehicles would have to average around 36 mpg in realworld driving by 2026. The deal also slightly slows the rate of growth in the early years “to provide additional lead time” for the auto industry, the statement said.
The four automakers see the California agreement as “insurance” to provide some certainty to the industry and the state no matter who wins the 2020 presidential elections, according to a person familiar with the talks who asked not to be identified because details of the negotiations haven’t been made public.
The four automakers represent about 30 percent of U.S. new-vehicle sales.
The Alliance of Automobile Manufacturers, which represents a dozen automakers in and out of the California deal, said in a statement that the industry still wants nationwide standards with yearover-year mileage increases that fit with what people are now buying: SUVs and pickups.
“Today’s announcement of the framework of an agreement by California and certain automakers acknowledges that the MY20222025 standards developed by the Obama administration are not attainable and need to be adjusted,” the statement said.
Alan Baum, a Detroit-area consultant who does work for the auto industry and environmental groups, said the deal is designed to get the rest of the auto industry on board and to force the administration to the bargaining table with California.
“This really puts California in a much stronger position because this really puts some pressure on the federal government,” Baum said. “These four automakers don’t want to be out on an island here. They would like their competitors to do this as well.”
He said the deal could delay a final rule that’s supposed to come from the federal government in August or September, keeping the current standards in place longer. For the automakers, it’s not much different from how they were preparing to meet the Obama administration standards, he said.
Under the agreement, fuel economy and corresponding greenhouse gas emissions standards would rise by 3.7 percent per year, starting with the 2022 model year, through 2026, according to a statement from the four automakers. They would have gone up by 4.7 percent per year through 2025 under the Obama standards, according to California.
Automakers could get 1 percentage point of the increase by using advanced technology credits such as those for hydrogen fuel cell, plug-in gas-electric hybrids and battery electric vehicles. And they would get credits for devices that aren’t counted in EPA test cycles such as stopping the engine at red lights and restarting it quickly when the driver wants to go.