Automakers Distressed Over EPA’s Fuel Economy Announcement

Automakers are feeling frustrated with the federal government for tightening the grip on reaching fuel economy and emissions targets.

The U.S. Environmental Protection Agency’s decision last week to shorten the midterm feedback and approval process of the 54.5 mpg mandate to the end of this year was shocking for several automakers. The midterm evaluation process, which began in July, was originally given a deadline of April 2018 for the EPA to issue its final ruling.

The mpg and emissions targets will begin notching up into phase two of targets set to be completed in 2025.

Automakers feel cheated over a compromise deal made with the Obama administration in 2011 to advance what came to be known the One National Program. That program supported the president’s goal of aligning greenhouse-gas and fuel-economy regulations.

There’s also been concern expressed over incoming President-elect Trump clashing with the EPA’s decision after he voiced a great deal of deregulatory campaign rhetoric.

Automotive executives had been releasing statements of support after the surprise election victory, and looked forward to working with the newly-elected president on taking what they considered to be a more realistic, economical approach to hitting federal targets in fuel economy and emissions rules. The election results come at a time when automakers had seen gas prices stay low, light-truck sales boom, and demand for hybrid and electric cars staying down to a niche level.

Mark Fields, president and CEO of Ford Motor Co., voiced those concerns over the EPA’s decision Friday in an interview with Bloomberg.

“What happened was through eleventh-hour politics, it short-circuited a data-driven development of regulations,” Fields said.

Fields warned that the agency’s action will disrupt the planned mid-term review. The Ford chief said the automaker would now turn to Trump to continue the dialog as planned.

The new timeline set by the EPA last week makes it possible for EPA Administrator Gina McCarthy to issue the final ruling. If that happens, it would be much tougher for the Trump administration to change the standards, said Dave Cooke, senior vehicles analyst at the Union of Concerned Scientists.

“They would have to do a new rulemaking,” Cooke said. “That’s a large undertaking. This is years’ worth of data and pretty rigorous analytic work justifying this conclusion. You can’t just snap your fingers and say, “I don’t like what the data concludes.'”

The streamlined process will also push the National Highway Traffic Safety Administration to do its job much sooner than originally planned. NHTSA must still set the corporate average fuel economy standards for 2022-2025.

NHTSA’s governing agency, the U.S. Department of Transportation, said last week that it planned to issue CAFÉ standards soon. The agency will also consider a request by automakers to streamline nagging differences between CAFE standards and EPA’s rules.

Auto executives made comments privately with Automotive News. Concerns were expressed that it was political decision to prevent the incoming president and his new EPA appointee from undermining a critical part of Obama’s environmental legacy.

“No one was expecting Trump to blow up” the national program, wrote one senior executive in an email. “But we were hopeful that his administration may provide some increased flexibility/timing relief. This move insures that any flexibilities sought by the industry would now have to be addressed through additional rulemaking.”

The EPA action, this executive added, “potentially creates an atmosphere of confrontation versus collaboration.”

Ford’s chief lobbyist, Ziad Ojakli, agreed with the company’s CEO, describing EPA’s move as “11th-hour politics in a lame-duck administration” that “short-circuited a data-driven process for developing regulation.”

SEE ALSO:  Obama Administration Acts to Lock in 2025 Emissions Standards Ahead Of Trump’s Taking Office

Janet McCabe, the acting administrator of the EPA’s Office of Air and Radiation who announced the EPA’s decision last week, said that desire for consistency and predictability were already addressed and had persuaded automakers to agree to the standards in the first place

“The technical record could arguably support strengthening the 2022-2025 standards,” McCabe told reporters last week. “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.”

Trump’s views about the national fuel economy and emissions program are unknown. His transition team didn’t respond to an email from Automotive News seeking comment last week.

Trump is expected to resist the EPA’s decision. He has been skeptical over evidence of climate change, and he’s promised to block regulations that could unduly burden companies.

If that’s the case, Trump could launch a rule-making process to upend the EPA standards and other powers the federal agency can exercise. The 2022-2025 fuel economy standards could be weakened; the new president could also seek legislation from Congress to soften the fuel-economy and emissions regulations.

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