Trump administration moves to lower fuel economy standards

Departments - Regulations

May 7, 2018

More than a year after promising to revisit Obama-era fuel economy rules, President Donald Trump’s administration has taken steps to restart the rulemaking process. Obama-era rules set in 2012 mandated 54.5mpg average fuel economy by 2025, a standard that many automakers have complained is unworkable.

With several offset credits, for activities such as updating refrigerants for air conditioning systems, real-world requirements were closer to 45mpg. However, without many buyers opting for electric vehicles, even that lower number was a major challenge (see Rearview, pg. 58).

Automakers agreed to the higher standards in 2012, in part, because regulators included a midterm evaluation (MTE) process that would give them the chance to lobby for more realistic standards in 2017 and 2018. However, in the final days of his administration, Obama’s EPA sped up the MTE process, saying the 54.5mpg figure should stand.

U.S. Environmental Protection Agency (EPA) Administrator Scott Pruitt has ruled that Obama’s MTE was faulty, effectively throwing out that determination. While automakers and car dealers praised the decision, environmental groups attacked it.

“Obama’s EPA cut the MTE process short with politically charged expediency, made assumptions about the standards that didn’t comport with reality, and set the standards too high,” Pruitt said.

In addition, Pruitt threatened to cancel a waiver to federal emission rules that allows the California Air Resources Board (CARB) to set higher emissions standards than the federal government. Twelve other states follow California’s lead, effectively creating two standards. Automakers agreed to the higher 2012 standards, in part, because of the promise to harmonize CARB with the EPA.

“Cooperative federalism doesn’t mean that one state can dictate standards for the rest of the country. EPA will set a national standard for greenhouse gas emissions,” Pruitt said.

Lawmakers in California and states that follow its standard have threatened to sue if the EPA revokes the waiver that allows those states to set higher emissions and fuel economy standards. CARB Chair Mary D. Nichols called Pruitt’s actions “a politically motivated effort to weaken clean vehicle standards with no documentation, evidence, or law to back up that decision.”

The EPA’s decision had been expected for more than a year, following Trump’s announcement that the agency would reconsider the Obama ruling. In filings rejecting the late 2016 findings from the Obama administration, Pruitt relied heavily on comments from automakers and lobbying groups, mostly the Alliance of Automobile Manufacturers. Those groups have argued that many of the EPA’s 2012 market assumptions have proven to be wrong.

Fuel economy has improved in the past six years as automakers have slashed vehicle weights; increased the use of smaller, turbocharged engines; and increased the use of 8-, 9-, and 10-speed automatic transmissions. However, sales of hybrid and electric cars have not become a significant source of sales, and consumer tastes have shifted from cars toward trucks, sport utility vehicles (SUVs), and crossovers.

The ruling effectively restarts the process, giving automakers and industry groups a chance to argue for changes to future efficiency mandates. Pruitt did not provide a timeline for how quickly the EPA will develop new rules.;;