Automakers and Environmental Groups Prepare to Battle Over Fuel Economy Rules

Automakers appear to be bracing for a long-term battle with environmental groups over the federal government’s 2025 fuel economy and emissions rules.

Environmental groups are threatening legal action if the rules gets weakened.

More is being revealed following a letter sent Friday to President Donald Trump by 18 auto industry executives asking him to reinstate a U.S. Environmental Protection Agency review of fuel economy regulations through 2025. Automakers say that EPA unfairly cut the process short right before the Obama administration left office.

Automotive executives had been sending out warnings to the Trump administration on job loss and heavy costs related to manufacturing and marketing these increasingly strict policies. Friday’s letter was signed by chief executives including Mary Barra of General Motors, Mark Fields of Ford, and Sergio Marchionne of Fiat Chrysler Automobiles. These three chiefs expressed these and other concerns to Trump during a meeting last month.

The letter warned that “ignoring consumer preferences and market realities will drive up costs for buyers and threaten future production levels.”

“We’ll see him in court,” Dan Becker, director of the Safe Climate Campaign, said about Trump and the group’s planned response if the rules are weakened. “There are a lot of reasons to keep the standards in place and there will be a fight.”

Automakers aren’t basing their arguments on the technical standards used in the federal mandate for fuel efficient vehicles, according to another source. The review process came last summer from a 1,200-page Technical Assessment Report that had examined costs, technology effectiveness, and other aspects of the federal standards.

“The primary issue here is we do not see any kind of technical basis for weakening the standards,” said Roland Hwang, director of the energy and transportation program at the Natural Resources Defense Council. “We’re looking at our options,” he said.

Hwang described the technical review “one of the most thorough decision-making processes I’ve seen by an agency.”

The NRDC views automakers’ request to open up the review again for more input as a move to “politically meddle with what should be a science-based decision,” he said.

“I don’t know what information they could bring to the table that hasn’t been brought to the table already,” Hwang said.

Hwang declined to say whether NRDC would file litigation.

Oklahoma Attorney General Scott Pruitt, Trump’s nominee to lead the EPA, told a Senate panel last month that he planned to review the EPA’s final determination that the emission rules should remain intact.

Automakers are hoping that Trump’s strategy to ease regulatory burdens on corporations will help make the case for easing the fuel economy and emissions standards.

Even if the automakers are gaining support from the Trump administration, weakening the standards will take a long time. Automotive News reported that it’s likely that Trump would need to carry it out as a joint exercise with the National Highway Traffic Safety Administration.

NHTSA would then be writing fuel economy standards for those same years, said Jeff Holmstead, a former assistant administrator at the EPA and now a partner at Bracewell LLP in Washington.

“I don’t think they’d completely eviscerate those regulations,” Holmstead said. “But there are probably ways to make them more flexible and reduce the cost.”

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Reinstating the mid-term review would require public notices and comment periods that would probably last a year. If he becomes EPA head, Pruitt would need to provide a formal explanation on why he’s scrapping the Obama administration’s decision.

Legal entanglements are likely to be inevitable, an academic said.

“While the auto industry might welcome lower fuel efficiency standards, environmental groups and consumer advocates almost certainly would sue,” said David Uhlmann, director of the University of Michigan’s Environmental Law and Policy Program.

“The reviewing court is not likely to view favorably the fact that a new administration tried to do a 180-degree turn from the previous administration” and will “want to be assured there’s a rational basis for the change,” he said.

Automotive News