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Canada and California sign MOU to work together on cleaner transportation

26 June 2019

Canada’s Minister of Environment and Climate Change, Catherine McKenna, and the Chair of the California Air Resources Board (CARB), Mary Nichols, signed a new cooperation agreement to advance cleaner vehicles and fuels.

The Memorandum of Understanding (MOU) “commits both governments to work together on developing their respective regulations to cut greenhouse gas emissions from light-duty vehicles, such as those currently in effect in Canada, California and the 13 U.S. states that have adopted California’s standards”.

While not explicitly stated in the MOU, both the wording and the timing of the agreement suggest that Environment Canada is inclined to maintain the current GHG emission and fuel economy standards. This puts additional pressure on the US federal administration not to relax the standards.

Canada is currently completing a mid-term review of its light-duty vehicle regulations. In 2016, California conducted their review of vehicle standards through the 2025 model year and found the standards achievable, cost-effective and appropriate.

In the final days of president Obama administration, the US EPA determined that US GHG emission standards for 2022-2025 light-duty vehicles remain appropriate and that a rulemaking to change them is not warranted. This determination was reversed by the EPA under president Trump—an action prompted by petitions from the auto industry to relax the standards. The industry was concerned about the cost of efficiency technologies to meet the fuel economy requirements that would increase by as much as 4% per year over 2022-2025.

In August 2018, the EPA proposed to freeze the GHG and fuel economy standards at the 2020 levels, and to withdraw the 2013 waiver for the California “Advanced Clean Car” regulations to prevent the state from maintaining more stringent GHG emission requirements. This EPA proposal has been strongly opposed by California. The withdrawal of the EPA waiver for GHG regulations would most likely lead to a lengthy court battle between the EPA and the State of California, as well as other states that adopted California emission rules. One effect of the freezing of the GHG standards as proposed by the EPA would be a dramatic reduction in the number of electrically chargeable vehicles (PHEV, BEV) that would be required to meet the standards.

Canada adopts vehicle emission regulations that are based on US standards. Faced with the potential relaxation of the US federal GHG and fuel economy rules, Canada could choose to follow either the relaxed EPA standards, or to maintain the current, more stringent regulation supported by California. The MOU suggests that Environment Canada’s preference is to keep the current standards.

The new partnership will also see Canada and California work together to accelerate the adoption of zero-emission vehicles like electric cars. California aims to have five million zero-emission vehicles on the road by 2030, and requires automakers to ensure that a growing fraction of their sales are zero-emission vehicles. Canada aims to have 100% of vehicles sold in this country be zero-emission by 2040.

The 13 states working with California on regulations to reduce GHG emissions from vehicles are Colorado, Connecticut, Delaware, Maine, Maryland, Massachusetts, New Jersey, New York, Oregon, Pennsylvania, Rhode Island, Vermont and Washington. Combined, these states and California constitute over 40% of the US passenger vehicle market.

Source: CARB