EPA Ruling Will Accelerate the Transition to Zero Emission Vehicles

The U.S. Environmental Protection Agency has decided to restore California’s authority to enforce its own vehicle emission standards, reversing a controversial policy of the Trump Administration. The long awaited ruling was announced on March 9th after over a year of deliberation, bringing great satisfaction to folks concerned about climate change.

The announcement marks the culmination of a process that began on the day President Joe Biden took office. Biden’s Executive Order 13990 directed his agencies to initiate a sweeping review of virtually all environmental regulations enacted by the previous administration. Section 2 (ii) of the order singled out Trump’s “Safer Affordable FuelEfficient (SAFE) Vehicles Rule”, which had significantly reduced the stringency of greenhouse gas standards for light duty vehicles and revoked California’s waiver of preemption under the Clean Air Act (CAA), preventing California from enforcing its own tailpipe emission standards.

Over a dozen states have adopted California’s stricter emission standards under Section 177 of the CAA, but the SAFE Rule also included an interpretation of Section 177 that would have prevented them doing so, even if California’s waiver were to be granted. The EPA’s recent ruling countermands this statutory interpretation, reaffirming the right of environmentally progressive states to adopt the Golden State’s stricter rules.

The Trump Administration’s determined efforts to deregulate the auto industry have now largely been reversed. Last December, the EPA finalized much stricter light duty vehicle emission standards that will govern the 2023-2026 model years. New federal standards for 2027 and beyond will be finalized before Biden’s term of office is completed.

The restoration of California’s authority to enforce stricter emission standards that can then be adopted by other states is arguably more significant than the tightening of the federal standards. The waiver of preemption applies to California’s entire Advanced Clean Car Program, which includes fairly stringent greenhouse gas (GHG) emission targets and, more importantly, zero emission vehicle (ZEV) mandates. California’s GHG standards are similar to the federal standards, encouraging fleets of cars sold by individual automakers to remain below an average threshold of tailpipe carbon dioxide emissions. This regulatory approach is extremely lenient and only provides slow, incremental tailpipe CO2 abatement. While the EPA’s regulatory framework includes provisions that incentivize the proliferation of ZEVs, it has no mechanism for enforcing specific ZEV quotas. The restored waiver of preemption and the reinterpretation of Section 177 will allow a large number of states to aggressively accelerate the transition away from internal combustion vehicles using ZEV mandates. Together, California and the Section 177 states account for roughly 40% of the U.S. auto market.

Many countries are turning to ZEV mandates because electric vehicles and fuel cell vehicles are seen as the world’s best hope for eliminating tailpipe CO2 entirely. The restoration of California’s waiver will enable California’s Air Resources Board to implement Governor Gavin Newsom’s courageous Executive Order N-79-20, which calls for phasing out the sale of internal combustion vehicles by 2035. Up until now, California has only required automakers to manufacture fleets that include a small percentage of ZEVs. The implementation of N-79-20 will necessitate ZEV quotas that increase rapidly each year, starting in 2026. The challenging new regulations will be finalized this summer, solidifying California’s reputation as a bold leader in environmental stewardship.