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Phil Covington headshot

EPA Relaxes Automobile Efficiency Standards Through 2026

In a ruling that could sow confusion among automakers, the EPA announced a rollback of automobile fuel efficiency standards.
By Phil Covington

With all the turmoil going on in the world today and everyone’s attention diverted by the global pandemic, the Environmental Protection Agency (EPA) and The National Highway Traffic Safety Administration (NHTSA) once again slipped through a ruling this week that imposes less demands on the U.S. transportation sector.

The final ruling of the Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule for Model Years 2021-2026 Passenger Cars and Light Trucks was signed on March 30. This ruling undermines the vehicle fuel efficiency requirements through model year 2026 that the Obama administration had established.

A rollback on mileage standards

While the existing rules demand a 5 percent boost in annual fuel efficiency for manufacturers’ fleet averages, the new rule instead relaxes this to 1.5 percent. In effect, as reported by the San Francisco Chronicle, the result is that by 2026, cars will only have to achieve on average 40 miles per gallon (MPG) as opposed to closer to 50 MPG under the existing rule.

The Obama administration established these fuel efficiency goals to align federal standards with California’s stricter ones. California has always had a waiver to the EPA’s Clean Air Act, allowing the state to set its own, more stringent targets. In part, this policy aimed to satisfy auto manufacturers' desire for a single fuel efficiency standard across the country rather than having to meet a patchwork of different ones state by state.

With the EPA’s new rule, the current administration advances its strategy to rollback efficiency standards in a two-pronged attack. First, the Trump administration announced in September 2019 its intent to withdraw California’s Clean Air Act waiver. Now, it is following up with looser federal fuel efficiency standards to be imposed nationwide.

California pushes back against the EPA

California, along with 22 other states, is fighting the Trump administration in court over the removal of the waiver, claiming that similar waivers have never been revoked in the past and that the Clean Air Act, in any case, provides no process for doing so. Ken Kimmel, President of the Union of Concerned Scientists said last year, “It’s yet another way the administration is defying science, the law, and democratic norms to enable increased pollution.”

Indeed, according to the Chronicle, more than one billion metric tons of carbon emissions will result from cars that automakers would manufacture under the more relaxed new standards, citing an analysis of models undertaken by the Climate Law Institute’s Maya Golden.

Nevertheless, the EPA claims it’s pursuing the new standard in the interest of consumers. The agency’s premise is that meeting existing fuel efficiency targets would be too expensive due to increased technology costs. Relaxing them, as the EPA says in their final rule document, would save automakers between $86 billion and $126 billion over the lifetime of vehicles through model year 2029, and consumers would pay between $977 and $1,023 less per vehicle.

Still, what consumers might save on the dealer forecourt, they’ll spend at the pumps - in all likelihood completely offsetting any increased cost of a more efficient vehicle. The Sierra Club asserts:

Preliminary analysis indicates that the rollback would increase fuel costs by more than $240 billion; result in 18,555 premature deaths; produce 1.5 billion metric tons of climate pollution (comparable to the pollution emitted by 68 coal plants operating for 5 years); and contribute to one million lost work days.”

The rollback in fuel standards has been in the pipeline since 2017, almost from the advent of the Trump administration. This shift in policy stems in part from a request from auto manufacturers who were lobbying for a relaxation of the EPA’s targets as they deemed them overly expensive to meet.

Automakers now face confusion

But whereas under the Obama EPA’s rules, car makers were ensured a consistent standard to meet across the country, instead they now face uncertainty as to whether the new, or the old rule will stand, as the new rule will doubtless face legal challenges. Furthermore, the EPA’s ruling leaves them all in limbo as they proceed with their 2022 fleets and beyond.

The EPA’s decision has also left a divided automobile industry.

Ford, Honda, BMW and Volkswagen have pushed for tighter standards and have agreed to meet California’s goals, while other major automakers have sided with the Trump administration, no doubt preferring some leeway to produce larger, less efficient vehicles.

Plug In America sees the EPA’s new rule as a blow to electrification, asserting that tighter fuel economy standards send a stronger signal to consumers to adopt EV’s. Furthermore, from Plug In America’s point of view, introducing the new rule now is tone deaf. “At a time when we are experiencing a global health crisis, we should not be weakening fuel efficiency standards and adding more pollution to the air we breathe,” said Plug In America’s executive director Joel Levin.

Of course, the matter will now head to the courts and the EPA may face shaky ground there. The Chronicle quoted Julia Stein, environmental law professor at the UCLA School of Law, who said: “the administration has really struggled to provide an adequate basis to roll back the Obama-era standards.”

The EPA’s head, Andrew Wheeler, says the new rule will save lives and money. Wheeler’s “saving lives” argument is based on the tenuous claim that consumers won’t be able to afford a new car under the existing Obama-era rules, and therefore will drive older vehicles. That assumption, however, is hard for the EPA to substantiate.

In the meantime, auto manufacturers can circumvent the uncertainty they face by simply adopting the stricter standards. They can also look at cues visible in other countries where demands for zero emissions vehicles are growing, such as in the United Kingdom, which plans to phase out all fossil fuel powered cars by 2035. The auto industry is, after all, a global one - and if the automakers want to compete globally, they’ll need to invest in new technology anyway.

Image credit: Joey Kyber/Unsplash

Phil Covington headshot

Phil Covington holds an MBA in Sustainable Management from Presidio Graduate School. In the past, he spent 16 years in the freight transportation and logistics industry. Today, Phil's writing focuses on transportation, forestry, technology and matters of sustainability in business.

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