EPA jolts US auto industry, affirms CO2 standards

Washington — The U.S. Environmental Protection Agency proposed to leave in place its greenhouse gas emissions standards for light vehicles through the 2025 model year, a quicker-than-expected move that shocked auto industry officials and set up a major fight between the industry and regulators.

The proposal kicks off a 30-day comment period, after which the EPA administrator could finalize a Nov. 30 determination that the standards are achievable and don't need to updated.

Under that timeline, the standards for the 2022 through 2025 model years could take full force before President Obama leaves office on Jan. 20, shoring up one of his signature environmental policies against a potential challenge by the administration of President-elect Donald Trump, who has called for rolling back or scrutinizing many federal regulations and voiced skepticism about efforts to combat climate change.

The rules would remain vulnerable to changes by Trump or a future administration, which could order the EPA to issue a new rule undoing the current one, but that would be a protracted process, subject to the full complement of notice and comment requirements. And it would mean overturning thousands of pages of agency science underpinning the current standards and surviving an inevitable court challenge from environmental groups.

A formal midterm evaluation of the standards, as required by law, has been under way since July to determine whether the final four years of the program are appropriate, or whether they needed to be modified. The EPA said its analysis of fuel economy improvements and feedback from automakers has shown no reason why the 2022-25 model year greenhouse gas standards should be changed.

In a statement, the EPA said “extensive technical analysis” shows automakers are on track to achieve the 2025 model year standards at “similar or even a lower cost” than envisioned when they were issued in 2012.

“Due to the industry's rapid technological advancement, the technical record could arguably support strengthening the 2022-2025 standards,” Janet McCabe, acting assistant administrator for the EPA's Office of Air and Radiation, said in a conference call with reporters. “However, the administrator's judgment is [that] now is not the time to introduce uncertainty by changing the standards. The industry has made huge investments in fuel efficiency and low emissions technologies based on these standards, and any changes now may disrupt those plans.”

The proposal that came today was expected to come sometime in 2017, according to a timeline previously posted on the EPA's website. A final decision was due no later than April 2018.

“The April 2018 deadline was a ‘no later than' set forth in the 2012 rule,” McCabe said. “There is no required precise date on which the final determination needs to be done.”

McCabe said the decision was based on substantial analysis and a “rigorous technical record,” not what the incoming Trump administration may do.

“That's really not what's on our minds,” she said.

Luke Tonachel, director of the Clean Vehicles and Fuels Project at the Natural Resources Defense Council, said the standards are achieving what they were designed to do.

“They're protecting our health and climate from dangerous pollution, saving billions of gallons of fuel, and saving car owners an average of nearly $4,000 over the life of the vehicle,” he said in a statement, adding: “There's no evidence we should slow down.”

But the Alliance of Automobile Manufacturers blasted the move as an attempt to “rush out” the proposal before Trump could take office, calling it an “extraordinary and premature” move that short-circuits the evaluation process.

Just weeks ago, the alliance wrote a letter to the Trump transition team calling for a broad review of all regulations and urging the incoming administration to consider barring the EPA from issuing any proposed determination on the appropriateness of the greenhouse gas standards until Trump's administration could lead talks between carmakers and regulators on the final years of the rule.

“The two pillars of this important fuel economy program since day one have been the concept of One National Program and the equally important commitment to a rigorous, fact-based midterm review,” the alliance said. “Now, it seems, both pillars have been compromised. There is neither One National Program nor a credible midterm review.”

The One National Program regulations that took effect in 2012 aimed to align vehicle greenhouse standards overseen by the EPA and the California Air Resources Board with corporate average fuel economy targets administered by the National Highway Traffic Safety Administration. The plan was a landmark deal brokered by the Obama administration to slash fuel consumption and carbon dioxide emissions while providing automakers with a set of rules that would be tough but consistent nationwide.

A midterm evaluation was built into the greenhouse gas rules to ensure the final four years of the EPA program were appropriate. NHTSA must also still issue CAFE standards for the 2022-25 model years.

Those factors set up 2016 and 2017 as pivotal years for automakers to win concessions from regulators.

While stopping short of calling for a major rollback of the standards, automakers have pushed regulators to weigh marketplace realities — such as low gasoline prices, consumer preferences and slow sales of hybrid and other advanced technology vehicles such as battery-electric cars — more heavily as they consider changes during the midterm evaluation.

John Bozzella, CEO of the Association of Global Automakers, said it's “disappointing the EPA has chosen to disregard this input,” even though its member companies have cooperated with the EPA “in good faith” to address those factors.