Trump Completes Rollback Of Vehicle Fuel Efficiency Standards

The Trump administration has issued a final rule completing the rollback of Obama-era fuel economy and emissions standards for cars and light trucks, potentially significantly affecting the electric vehicles market, according to a research group.

The Safer Affordable Fuel-Efficient (SAFE) Vehicle Rule, issued Tuesday by the National Highway Traffic Safety Administration (NHTSA) and the U.S. Environmental Protection Agency (EPA), sets corporate average fuel economy (CAFE) and carbon dioxide (CO2) emissions standards for model years 2021-2026.

Under the SAFE Rule — which the U.S. Department of Transportation (DOT) is calling "the largest deregulatory initiative of this administration" — projected overall industry average required fuel economy in model years 2021-2026 drops from 46.7 mpg in model year 2025 under the 2012 standards to 40.4 mpg under the new rule.

The final rule will increase stringency of CAFE and CO2 emissions standards by 1.5% each year through model year 2026, as compared with the standards issued in 2012, which would have required about 5% annual increases. The majority of automakers are not meeting the 2012 standard without resorting to the use of carbon credits, according to DOT.

"The SAFE Rule reflects the realities of today's markets, including substantially lower oil prices than in the original 2012 projection, significant increases in U.S. oil production, and growing consumer demand for larger vehicles," DOT stated of the nearly 2,000-page rule.

Action by President Donald Trump in September to block California's authority to set its own emissions standards — which California is challenging in federal court — was considered the first phase of the rollback. This second phase, which applies nationally, is expected to be challenged as well.

"Gutting the clean car standards makes no sense," said Gina McCarthy, president of the Natural Resources Defense Council and EPA chief under President Barack Obama. The only winner from this action is the oil industry, which wants us stuck driving dirty gas guzzlers as long as possible. We'll be seeing the Trump administration in court."

Obama himself tweeted, "We've seen all too terribly the consequences of those who denied warnings of a pandemic. We can't afford any more consequences of climate denial. All of us, especially young people, have to demand better of our government at every level and vote this fall."

EPA Administrator Andrew Wheeler, who said the final rule "strikes the right regulatory balance that protects our environment, and sets reasonable targets for the auto industry," acknowledged the potential for further litigation. "We hope that everybody will sit down and review our analysis. We hope that we will not see litigation, but of course we're prepared to defend the rule" if a court challenge arises, he said.

The final rule does not apply to heavy-truck emissions, but it will likely have policy implications for zero-carbon electric vehicle (ZEV) manufacturers.

"Relative to Obama-era rules, we find that rolling back national fuel economy standards and revoking California's waiver could reduce the share of ZEVs sold in 2035 by up to 8 percentage points nationwide, which could mean up to 14 million fewer ZEVs on the road by that year," stated an October 2019 report by energy research firm Rhodium Group.

The rollbacks could also increase greenhouse gas (GHG) emissions by more than a gigaton from 2020 to 2035, according to Rhodium Group. "This will impact California's ability to meet air quality and climate targets and the US's ability to stay within striking distance of GHG reductions needed to limit global temperature rise below 1.5 degrees Celsius."

Posted In: Freightwavesfuel efficiencyglobal climate changeUS Greenhouse gas emissionsGovernmentNewsRegulationsCommoditiesMarkets

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