WASHINGTON — California’s legal fight with the Trump administration over its right to set its own greenhouse gas (GHG) emissions standards has split automakers, with General Motors (GM), Toyota, Fiat Chrysler and several other automakers taking the side of the White House.
In 2009, the U.S. Environmental Protection Agency (EPA) under President Barack Obama granted California a waiver of federal Clean Air Act emissions standards that allowed the state to set its own, tougher standards to fight smog. Thirteen states and the District of Columbia follow California’s tougher standards, making up more than one-third of the U.S. vehicle market combined.
But in 2018, the Trump administration began laying the groundwork for denying California the waiver. The EPA and the U.S. Department of Transportation’s National Highway Traffic Safety Administration (NHTSA) under President Trump argue that California does not face “compelling and extraordinary conditions” that support the waiver. At the same time, the Trump administration began developing its own, less stringent fuel-economy program to replace the federal Corporate Average Fuel Economy standards set in place by President Obama.
After talks between California and the Trump administration to reach a compromise stalled, the state forged a voluntary framework with four automakers—Ford, Honda, BMW of North America and Volkswagen Group of America—in which they agree to pursue annual reductions in GHG emissions. The framework would provide the same GHG reductions as the original standards put in place during the Obama administration, but in five years instead of four as an “olive branch” to the Trump administration. A joint statement from the four automakers pointed to the need for regulatory certainty in striking the deal.
The Trump administration, angered by the surprise agreement, announced in September that it was revoking California’s waiver. Meanwhile, the U.S. Department of Justice launched an antitrust investigation into the four automakers who signed the California agreement.
Pursuit of a Middle Ground
On Sept. 20, two days after the waiver was revoked, California, 22 other states, the District of Columbia, Los Angeles and New York joined in a lawsuit against the NHTSA, arguing it had exceeded its authority through this action. As reported by NPR, the plaintiffs argued that the agency did not conduct the required analysis under law in revoking the waiver, and said that two court decisions had already upheld California’s emission standards.
The lawsuit soon exposed a split among the largest automakers. In an Oct. 28 filing with the U.S. Court of Appeals for the District of Columbia, 11 automakers—including GM, Toyota, Hyundai Motors, Mazda, Nissan, Kia and Subaru—as well as the National Automobile Dealers Association asked the court to intervene in the litigation, Reuters reported. In the filing, the group said the Trump administration’s decision provided “vehicle manufacturers with the certainty that states cannot interfere with federal fuel-economy standards.”
John Bozzella, president and chief executive of Global Automakers, a trade group that represents large international businesses, told reporters that the 11 automakers were compelled to back the Trump administration’s position.
“It’s been the federal policy for the better part of 40 years that the federal government has the sole responsibility for regulating fuel economy standards, but it doesn’t have to get to that,” Bozzella said, speaking on behalf of the Coalition for Sustainable Automotive Regulation, the group formed by the 11 automakers.
“We can still reach an agreement” on fuel economy rules, Bozzella said, and pointed out that these 11 automakers still prefer finding a “middle ground” between California and the Trump administration.
“The decision to intervene in the lawsuit is about how the standard should be applied, not what the standard should be,” Bozzella said.
“We are disappointed in the Association of Global Automakers for hiding behind the Trump administration’s skirts and its assault on public health,” said Mary Nichols, chairwoman of the California Air Resources Board. She said California would “keep working with those automakers committed to a framework that delivers cleaner vehicles that benefit consumers and the environment.”