Trump Administration Proposes Fuel Economy Freeze

California’s waiver to set own emissions standards also challenged

WASHINGTON -- The Trump administration is proposing to freeze fuel-efficiency standards at model-year 2020 levels, a move that it estimates would save lives, decrease vehicle costs and increase fuel consumption by 2% to 3%, or a half-million barrels per day. It is also proposing to revoke California’s ability to enact its own vehicle-emission and greenhouse-gas standards.

On Aug. 2, the U.S. Department of Transportation’s National Highway Traffic Safety Administration (NHTSA) and the U.S. Environmental Protection Agency (EPA) released their notice of proposed rulemaking (NPRM) on model-year 2021-2026 passenger cars and light trucks. Dubbed the Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule, the proposal aims “to correct the national automobile fuel economy and greenhouse gas emissions standards to give the American people greater access to safer, more affordable vehicles that are cleaner for the environment,” according to a joint press release from the agencies. 

The proposal would freeze the overall industry fuel-economy average for vehicle model years 2021-2026 at 37 miles per gallon, vs. the 46.7 mpg standard under current rules finalized by the Obama administration in 2012.

In proposing the freeze, the agencies argue it balances safety, economic, technological, fuel conservation and pollution concerns. In particular, the NHTSA and EPA claim that the SAFE Vehicles Rule would prevent more than 12,000 fewer vehicle crash fatalities and save up to 1,000 lives each year during the lifetimes of vehicles built through model-year 2029. This argument is based on the theory that heavier, less fuel-efficient vehicles protect their occupants more than lighter, more fuel-efficient vehicles.

The agencies also argue that by relieving automakers of having to meet tougher fuel-economy standards, which has required the introduction of new technologies and materials, that vehicles will be more affordable to the average consumer. The NHTSA and EPA anticipate a $2,340 decrease in ownership costs with the proposed standards.

With the lower costs, the administration argues that consumers will be more likely to buy a new vehicle sooner, potentially boosting new vehicle sales by 1 million units through model-year 2029.

California Provoked

The NHTSA and EPA also propose to revoke California’s Clean Air Act waiver that allows it to enact its own zero-emission vehicle (ZEV) and greenhouse-gas (GHG) regulations. They argue that California does not face “compelling and extraordinary conditions” that support the waiver, and that the state’s current ZEV and GHG standards are technologically infeasible for automakers to meet. A dozen other states follow California’s tougher ZEV and GHG standards and, combined, make up about one-third of the U.S. vehicle market.

Instead, the agencies propose to create a 50-state fuel economy and emissions standard.

“Our proposal aims to strike the right regulatory balance based on the most recent information and create a 50-state solution that will enable more Americans to afford newer, safer vehicles that pollute less," said acting EPA administrator Andrew Wheeler. "More realistic standards can save lives while continuing to improve the environment." 

The Trump administration’s recent decisions on fuel-economy standards and the current proposal from EPA and NHTSA are likely to trigger several years of lawsuits. In May, California and 16 other states, along with the District of Columbia, filed a lawsuit challenging the EPA’s April ruling that current vehicle emissions standards through 2025 were “not appropriate.”

California Attorney General Xavier Becerra had already pledged to protect the tougher standards. “CA DOJ will use every legal tool at its disposal to defend today's national standards and reaffirm the facts and science behind them,” he said in an Aug. 2 tweet.

While automakers have supported easing the fuel-economy and emissions standards, they have not embraced an all-out freeze or starting a legal battle with California, which could introduce years of regulatory uncertainty into their manufacturing plans. In a statement, the Auto Alliance and Global Automakers associations emphasized a middle ground, and urged the government and California to work toward a compromise.

“Automakers support continued improvements in fuel economy and flexibilities that incentivize advanced technologies while balancing priorities like affordability, safety, jobs and the environment. With today’s release of the Administration’s proposals, it’s time for substantive negotiations to begin," it said. "We urge California and the federal government to find a common-sense solution that sets continued increases in vehicle efficiency standards while also meeting the needs of America’s drivers.”

EPA and NHTSA have opened a 60-day public comment period on several regulatory options, including their preferred fuel-economy freeze.

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