Automakers get chance to ease efficiency rules
Trump reopened the debate, called targets ‘out of control’
U.S. President Donald Trump’s pledge to ease environmental regulations hands automakers a second chance to amend the U.S. vehicle-efficiency standards that the Obama administration sought to finalize in its final days.
In a White House meeting Tuesday with the chief executives of General Motors Co., Ford Motor Co. and Fiat Chrysler Automobiles NV, Trump called environmental regulations “out of control.” That reopened a debate automakers say was unfairly cut short when former president Barack Obama issued a final determination on greenhouse-gas-emissions standards through model year 2025 a week before Trump’s inauguration.
“We are optimistic that these issues will get a fresh look,” said Gloria Bergquist, a spokesperson for the Alliance of Automobile Manufacturers, a trade group representing the three Detroit-based auto manufacturers and nine other carmakers. “Both our customers and those who work in the vital auto sector deserve no less.”
Yet even as the new administration lends carmakers a more willing ear, California’s powerful Air Resources Board remains the wild card. The agency sets its own efficiency targets, and could upend the rules that enable carmakers to sell the same vehicles in all 50 states.
Relaxed standards would make it easier for the companies to sell more of the light trucks that account for the bulk of U.S. carmaker profits. But it could put the industry at odds with consumer groups, who compare automaker opposition to environmental measures to the initial opposition to airbags and seatbelts.
“If President Trump were to roll back the fuel-efficiency standards, the biggest victims would be the voting block that put him into office, because these standards save consumers money, period,” said Jack Gillis, spokesperson for the Consumer Federation of America.
Automakers have argued that the Obama administration’s vehicle-efficiency standards are too costly in an era of cheap U.S. gasoline prices and tepid demand for the most-efficient vehicles. They also contend the regulations could impact auto-sector employment. At the same time, they are reluctant to pursue a major rollback of the overall efficiency goals because they’ve made significant investments in clean-car programs.
“The auto industry generally wants to keep the long-term goals,” said Robert Bienenfeld, assistant vicepresident for environmental policy at Honda Motor Co. in the U.S. “We’re just looking for some nearterm relief or flexibilities, because it’s very, very challenging. It’s not like the industry wants to do away with regulations. The question is ‘what’s the best approach?’ ”
With broad support from automakers, the Obama administration brokered a deal in 2011, to align the efficiency standards from the Environmental Protection Agency (EPA), the Department of Transportation and the California Air Resources Board that initially called for a 54.5miles-per-gallon fleet average by 2025. Now the EPA expects a fleet average of 50.8 mpg, from 35.3 today. The parties also agreed to a midterm evaluation of the rules.
The EPA shocked the industry by moving on Jan. 13, finding its 20222025 emissions standards were feasible and needed no change. The Trump administration would need to initiate a new rulemaking, which could take more than a year.
Automakers may have a quicker remedy. They could push for changes through the National Highway Traffic Safety Administration (NHTSA), which must promulgate fresh Corporate Average Fuel Economy (CAFE) standards for the 20222025 model years. That rulemaking is expected to begin by mid-2017. NHTSA’s CAFE targets may remain aligned with the EPA’s standards, “but the whole idea is it could also change,” former NHTSA admin- istrator Mark Rosekind said in a Jan. 17 interview before he left the agency.
“Everyone agrees that the NHTSA fuel-economy standards and the EPA’s greenhouse-gas standards should be harmonized,” said Jeff Holmstead, a former assistant administrator of the EPA for Air & Radiation and now a partner at law firm Bracewell LLP. “That’s what the Obama folks did, and I would expect the Trump administration to do the same thing.”
California regulators have signalled they’re unwilling to back down from their ambitious efficiency standards in the largest auto-sales market among the states. Last week, staff recommended the agency boost the requirement for zero-emission vehicles and plug-in hybrids to as much as 40 per cent of an automaker’s sales by 2030, up from 3 per cent. They also warned Sacramento could go its own way.
The same day, Oklahoma Attorney General Scott Pruitt, Trump’s nominee for EPA administrator, said he’d review California’s ability to chart its own course, embedded in the 1970 Clean Air Act, setting up a possible showdown. He also said he’d review the EPA’s mid-term conclusion.