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US EPA & NHTSA propose to freeze light-duty GHG standards at 2020 levels

2 August 2018

The US Environmental Protection Agency (EPA) and US Department of Transportation’s National Highway Traffic Safety Administration (NHTSA) released a notice of proposed rulemaking, the Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule for Model Years 2021-2026 Passenger Cars and Light Trucks (SAFE Vehicles Rule). The proposal would relax the existing GHG emission and CAFE fuel economy standards by simply freezing them at the 2020 levels. The EPA would also withdraw the California waiver for their LEV III & GHG emission regulations, to prevent the state from enforcing their own, more stringent standards. The proposal follows the EPA determination that the current standards may be too stringent and should be revised.

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“There are compelling reasons for a new rulemaking on fuel economy standards for 2021-2026,” said US Transportation Secretary Elaine L. Chao. “More realistic standards will promote a healthy economy by bringing newer, safer, cleaner and more fuel-efficient vehicles to U.S. roads and we look forward to receiving input from the public.”

The EPA/NHTSA are proposing eight alternative approaches for the MY 2021-2026 standards. The "Preferred Alternative" does not require any increase in fuel economy and locks in the existing MY 2020 standards through 2026. The other alternatives would require a fuel economy increase from 0.5% to 3.0% and include other changes to the current regulation.

The proposal also includes provisions intended to ensure that California would not adopt and enforce their own, more stringent standards. The EPA & NHTSA explain in their proposal:

This proposal addresses a fundamental and unnecessary complication in the currently-existing regulatory framework, which is the regulation of GHG emissions from passenger cars and light trucks by the State of California through its GHG standards and Zero Emission Vehicle (ZEV) mandate and subsequent adoption of these standards by other States. Both EPCA and the CAA preempt State regulation of motor vehicle emissions (in EPCA’s case, standards that are related to fuel economy standards). The CAA gives EPA the authority to waive preemption for California under certain circumstances. EPCA does not provide for a waiver of preemption under any circumstances. In short, the agencies propose to maintain one national standard—a standard that is set exclusively by the Federal government.

Under the proposal, the EPA would withdraw the 2013 waiver for the California “Advanced Clean Car” regulations, composed of GHG standards, Low Emission Vehicle (LEV III) program and the ZEV program. The EPA argues that the Clean Air Act (CAA) waivers have been intended for smog forming pollutants as opposed to CO2, while the California GHG and ZEV mandates are in conflict with the US Energy Policy and Conservation Act (EPCA).

The withdrawal of the EPA waiver for GHG regulations is very likely to lead to a court battle between the EPA and the State of California, as well other states that adopted California emission rules.

The proposed relaxation of the GHG and fuel economy regulations has been triggered by the opposition of the auto industry to the existing, stringent regulations. The US auto industry petitioned the then President-elect Donald Trump in November 2016, and the then-EPA Administrator Scott Pruitt in February 2017, requesting that the EPA reconsider the 2025 GHG emission standards.

The US GHG and CAFE fuel economy requirements have been increasing steeply since around 2012. The fuel economy improvement required in the coming years under the current rules is on the order of 4% per year. As vehicle technologies representing the low hanging fruit have been largely implemented, future efficiency improvements are expected to be increasingly more costly. One important effect of the proposed regulatory changes would be a dramatic reduction in the number of electrically chargeable vehicles (PHEV, BEV) that would be required to meet the standards.

The EPA and NHTSA are seeking public feedback on the proposal and hope to issue a final rule this winter. Public comments will be accepted for 60 days after the proposal is published in the Federal Register.

Source: US EPA | NHTSA