Fuels

Automakers and California Make an Emissions Deal

Ford, Honda, Volkswagen and BMW agree to reductions as Trump administration pursues federal standards freeze
Photograph: Shutterstock

SACRAMENTO, Calif. Four automakers have struck an agreement with California to pursue annual greenhouse gas (GHG) emission reductions that would match current targets on a slightly longer timeline. This deal comes as the Trump administration pursues freezing existing standards and revoking California’s right to set its own, tougher emissions requirements.

Ford, Honda, BMW of North America and Volkswagen Group of America have agreed to a voluntary framework with the California Air Resource Board (CARB), the state’s regulatory authority, to continue to pursue annual reductions in vehicle GHG emissions through the 2026 model year. The automakers represent about 30% of of the U.S. automotive market. As part of the agreement, CARB and the automakers pledged to:

  • Continue the current 2025 model-year vehicle emissions standard until 2026, while meeting somewhat smaller year-over-year reduction targets. Effectively, these automakers agreed to a 3.7% reduction in their fleet’s GHG emissions over five years instead of the more aggressive original target of a 4.7% reduction over four years.
  • Support the transition to electric vehicles (EVs) by rewarding automakers that sell more EVs with extra credits to help them meet the GHG standard for their entire fleet. 
  • “Modestly” revising some limitations CARB had placed on automakers’ use of GHG-reducing technologies such as improvements to a vehicle’s aerodynamics and internal temperature control, and streamlining the agency’s review and approval process for new technologies.

Automakers who agree to and participate in the framework will forgo challenging California’s GHG and Zero Emission Vehicle programs, while California will consider them in compliance.

An ‘Olive Branch’?

CARB argues that this framework would provide the same GHG reductions as the original standards put in place during President Barack Obama’s administration, but in five years instead of four. Supporters note this shift of the timeline reflects California’s efforts to meet automakers’ requests for revising toughening standards as consumers gravitate toward less fuel-efficient SUVs and trucks because of lower gasoline prices.

The framework also emphasizes the need for California’s authority under the Clean Air Act to establish its own emissions rules—a right granted to it by the EPA under the Obama administration. The EPA under the Trump administration is challenging this authority, which essentially waives California’s adherence to weaker federal standards.  

In an interview with The Washington Post, CARB chair Mary Nichols said the agreement could serve as an “olive branch” to the Trump administration, which had cut off discussions with CARB on its Clean Air Act waiver and stricter standards. She said the new framework provides automakers with more flexibility in meeting emissions targets while avoiding the “massive backsliding” that would result from the Trump’s administration’s proposal.

The Trump administration aims to freeze mileage standards for light-duty vehicles at about 37 miles per gallon on average, instead of increasing them to about 51 mpg for the 2025 model year as the Obama administration had intended. Officials argued the lower mileage standards would make vehicles more affordable and, indirectly, safer.

“What we have here is a statement of principles intended to reach out to the federal government to move them off the track that they seem to be on and onto a more constructive track,” Nichols told The Washington Post. She said the four automakers had reached out to California in June about a possible compromise. In June, 17 domestic and foreign automakers asked the Trump administration and California Gov. Gavin Newsom to “resurrect” their efforts to find common ground, but the White House declined.

A joint statement from the four automakers pointed to the need for regulatory certainty in striking the deal with California.

“These terms will provide our companies much-needed regulatory certainty by allowing us to meet both federal and state requirements with a single national fleet, avoiding a patchwork of regulations while continuing to ensure meaningful greenhouse gas emissions reductions,” it said.

A spokesperson for the EPA described the voluntary framework as “a PR stunt that does nothing to further the one national standard that will provide certainty and relief for American consumers.”

 

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