With the EPA expected to propose in July fuel-efficiency rules that are likely tougher than the Trump administration’s standards, automakers could have the opportunity once again to unite behind a single national program that includes California.
After a handful of automakers — Ford Motor Co., BMW, Honda, Volkswagen and Volvo — sided with the state to meet stricter vehicle emissions standards through the 2026 model year, recent actions by two federal agencies and the Biden administration’s forthcoming near-term standards could put the whole country on one playing field again.
Key questions for the industry are whether the standards proposed in July will be tougher than those that the five automakers negotiated with California regulators and whether they will include requirements for zero-emission vehicles.
NHTSA and the EPA in April took the first steps toward reversing the Trump administration’s 2019 decision to revoke California’s authority to restrict tailpipe emissions and set ZEV mandates.
The agencies’ actions — a response to President Joe Biden’s executive order in January to review the Trump-era rule — open a path for compromise among regulators and automakers that previously had taken different sides.
“We hope this is a step toward alignment — an opportunity now to have states and the federal regulators and the industry work together,” John Bozzella, CEO of the Alliance for Automotive Innovation, told Automotive News this month.
The alliance represents a bulk of the auto industry, with members including the Detroit 3, Toyota and other automakers in the U.S. that had previously split into two factions over the Trump administration’s efforts to block California from setting its own vehicle emissions rules. The alliance does not represent Tesla, the country’s leading seller of electric vehicles.
Despite past differences, the industry has pledged to work with the Biden administration to establish a revised national program that includes California — the nation’s largest auto market.
The alliance said it supports a program that achieves improvements in vehicle greenhouse gas emissions “roughly midway” between the
Trump rules and those of the former Obama administration.
“There’s a pretty strong incentive this time around on everybody’s part to avoid that ugliness,” said John DeCicco, research professor emeritus at the University of Michigan. “The whole nature of the Biden administration — its own stance on everything — is seeking compromise to move forward.”
The approach bodes well for an industry that says it wants a single national program, said DeCicco, who expects the EPA to propose standards that are “fairly close” to the California deal.
The California Air Resources Board, which finalized agreements with the five automakers in August, says it is ready to implement the state’s program and wants a strong federal effort — one that supports progress toward Gov. Gavin Newsom’s goal of 100 percent ZEV sales for new light vehicles by 2035.
“The industry itself claims to want the certainty of a single national program, so now is an excellent opportunity for it to lock in that certainty and fully rejoin the global fight against the impacts of climate change,” CARB spokesman David Clegern said in an email.
Clegern declined to say what the administration’s final targets should be but said the board supports “the most stringent, feasible standards possible.”
The timing of the agencies’ actions on the Trump-era rule may suggest the administration is willing to let California take the lead — ultimately uniting the federal standards with the California program, according to Amanda Shafer Berman, a partner at Crowell & Moring’s Washington, D.C., office.
To be sure, EPA Administrator Michael Regan has said he is “a firm believer in California’s long-standing statutory authority” on vehicle emissions.
“To me, that suggests that the federal government is not going to try to leapfrog over the California standards and be even more aggressive,” Shafer Berman said.
Biden wants to have a carbon pollution-free power sector by 2035 and net-zero emissions by 2050. The president has said he wants to set “ambitious” fuel economy standards that encourage the adoption of EVs in the U.S.
“The California deal, to me, seems like the floor,” said Dan Becker, director of the Center for Biological Diversity’s Safe Climate Transport Campaign.
To achieve the administration’s climate policy goals by 2050, Becker said the administration will need to pursue standards that are “a lot tougher than the industry wants.”
John German, an automotive consultant who has worked for Honda, Chrysler and the EPA, said he would be surprised if both agencies did not simply align the near-term standards with what California has already negotiated so they can turn their focus to the 2027 model year and beyond.
“There are additional complications as we look out into the future and how you handle electric vehicles” and ZEV mandates, he said.
The University of Michigan’s DeCicco said a ZEV mandate — or even a target date for phasing out internal combustion engines — is likely to be left out of a national program.
“I would really expect that just part of the compromise is that we have unified programs on the actual fleet average standards for [corporate average fuel economy] and greenhouse gas emissions, while California and states that opt in keep this technology-forcing side program,” he said.
Standards post-2026 could be the period where a ZEV mandate becomes more plausible, however, and emissions standards become a lot more stringent, Shafer Berman said.
“The question is, how stringent as a result of trying to wrap in a ZEV mandate?” she said.