Biden Eases EV Rule but Keeps Heat on Automakers

Energy (DOE)Environmental Protection Agency Federal Agency/Executive Branch Federal Litigation Federal Regulation Opinions Policy Transportation (DOT)

March 20, 2024

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by Mike Lee (E&E News) The Biden administration released one of several coming car regulations Tuesday, a clean vehicle formula designed to push automakers to build more fuel-efficient or electric vehicles.

The Department of Energy softened its “petroleum equivalency factor” after complaints from the car industry, though environmentalists said the final rule is still strict enough to move auto fleets in a more fuel-efficient direction.

“The automakers’ free ride is over,” said Pete Huffman, a senior attorney at the Natural Resources Defense Council. “This important update from the Department of Energy will curtail automakers’ use of phantom credits they used to keep selling gas guzzlers. They now need to hit the accelerator on more fuel-efficient vehicles, saving consumers money at the pump.”

Tuesday’s clean car regulation is the first of four rules scheduled that could be announced in the next several weeks to propel the Biden administration’s plan to electrify large parts of the transportation system. EPA is expected to release its tailpipe standards for cars and light-duty trucks as soon as tomorrow, which could result in about two-thirds of new cars being electric by 2032. A similar standard for heavy-duty trucks is expected in the next few weeks.

Biden has made his car regulations — backed by billions of dollars in funding from the bipartisan infrastructure law and the Inflation Reduction Act — a key part of his program to combat climate change and create manufacturing jobs. With the presidential election looming, the administration has also made key concessions aimed at shoring up support among union workers in swing states.

Former President Donald Trump has lashed out at Biden for the “all-electric nonsense” in an effort to win over unionized auto workers. Over the weekend he predicted a “bloodbath” if he doesn’t get reelected. The remark was widely criticized for hinting at violence, but it also referred to the possibility that low-cost Chinese EVs could flood the country.

The formula DOE issued Tuesday determines how electric vehicles are scored under the government’s corporate average fuel economy (CAFE) standards. A higher score means that companies can still sell inefficient trucks and SUVs and meet the government’s fleetwide fuel economy goal by selling a relative handful of battery-powered vehicles. The new fuel economy requirements are expected to be completed in the coming months.

The original proposal would’ve slashed the calculation by 72 percent. Car companies said they’d be forced to pay billions of dollars in fines to meet the CAFE standard, all at the same time they’re investing to build new electric models.

The final proposal cuts the standard by 65 percent and phases in the reduction from 2027 to 2030. That would trim the estimated fuel economy of Ford’s F-150 Lightning electric truck from the equivalent of 238 miles per gallon to about 83.

The Alliance for Automotive Innovation, which represents most major carmakers, said the final version is “positive” but the full impact won’t be known until the Department of Transportation releases the CAFE standard later this year.

“CAFE is a major question mark because these regulations only work … if they work together,” John Bozzella, the trade group’s chief executive officer, said in a statement. READ MORE

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Petroleum-Equivalent Fuel Economy Calculation (U.S. Department of Energy)
Cascade of climate rules starts today with clean cars: The Biden administration is launching its most aggressive regulation to stem tailpipe pollution. (E&E News)
Senators prep effort to strike down EPA tailpipe rule -- The forthcoming rule is expected to go easier on carmarkers than than originally proposed, but Republicans say the administration is still rushing to EVs. (E&E Daily)
'This will be something that people see and feel’: What to expect from Biden's clean car push -- The Biden administration is launching its most aggressive regulation to stem tailpipe pollution. (Politico)
How a geeky calculation could weaken 2 clean car rules: A regulation that almost no one has heard of could allow carmakers to keep making gas-gulping SUVs. (E&E News Climatewire)
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States Challenge DOE Rule Revising The Petroleum-Equivalency Factor For EVs (Ethanol Producer Magazine)

Excerpt from E&E News: The regulation being announced by EPA Administrator Michael Regan, as POLITICO’s E&E News reported last week, would slash greenhouse gases from cars and light trucks in half, while pushing to have electric vehicles make up about two-thirds of new passenger vehicle sales by 2032.

It’s the highest-profile rule of four regulations being released in the coming weeks to overhaul the transportation sector, the nation’s largest source of climate pollution.

It marks the “single most important climate regulation in the history of the country,” said Margo Oge, a former EPA official who spoke to reporters on a call organized by the Environmental Defense Fund.

The transportation rules come as President Joe Biden tries to shed historically low approval ratings as he plunges into a reelection race by trying to convince voters that his policies can create jobs and help tame rapidly rising global temperatures. His presumptive opponent, former President Donald Trump, has pounced on Biden’s push for electric vehicles with violent depictions of a “bloodbath,” in an effort to sway voters in Michigan and other swing states.

EPA is also working on a similar rule for heavy trucks. The Department of Transportation is finishing fuel economy standards for cars and light trucks that run on gasoline. And on Tuesday the Department of Energy released new calculations that determine how electric vehicles are counted in the fuel economy standards — in a move that could make the national car fleet cleaner.

Trump calls Biden’s EV push a ‘ridiculous crusade’

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The rule is almost certain to be challenged in court and wind up before a conservative Supreme Court. Officials in several Republican-controlled states have already hinted that they’ll ask the courts to consider whether the tailpipe rule constitutes a “major question,” referring to a newly ascendant legal theory that says only Congress can set the rules for broad sections of the economy.

To safeguard the rule, federal agencies are racing to enact regulations in case Republicans take control of Congress in the fall. A new Congress can roll back regulations completed within the last 60 legislative days of a session — and the Biden administration is closely watching the clock.

Environmental and public health groups applaud the EPA for making changes to the car rule to help it survive some of the challenges. The rule, for example, doesn’t specify what kind of cars and trucks companies have to build. Instead it is expected to set a decreasing limit on carbon dioxide and other pollutants for vehicles built in model years 2027 through 2032.

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Despite the revisions,the rule would still cut carbon dioxide emissions from personal vehicles 52 percent by 2032, the same level included in the original plan. Altogether, the rule would prevent 7.1 billion tons of carbon dioxide pollution by 2055 compared to 7.3 billion tons in the original plan, the administration said. The regulation would also cut other hazardous pollutants from cars that disproportionately affect low-income residents and people of color.

The climate impact will depend on whether carmakers build more electric vehicles in the rule’s final few years, said Ben King, an associate director at the Rhodium Group, which analyzes government climate programs. Several analysts and researchers, including Rhodium, have already said the nation will need to enact stricter regulations to meet the Biden administration’s goal of zeroing out carbon emissions by 2050.

“If what this does is build a more sustainable model for the auto industry — it doesn’t hurt in the long run all that much,” King said. READ MORE

Excerpt from E&E Daily: Republican Sen. Dan Sullivan of Alaska said he plans to introduce a Congressional Review Act resolution that would nullify one of the most stringent climate rules for cars and light trucks — even as EPA will purportedly ease restrictions for manufacturers. The final action, expected to lead to more electric vehicle sales, will be unveiled Wednesday.

Sullivan is teaming up with Sen. Pete Ricketts of Nebraska, who said the "EV mandates" are "delusional." But he was cagey on the exact filing plans.

“Stay tuned,” he told E&E News on Tuesday. “There’s surely going to be some.”

EPA is also planning to issue a similar rule for heavy duty trucks, and Republicans are expected to object just as quickly.

"The average American family spends about $12,000 for a car, and EVs cost $53,000 on average. So what you’re talking about is really low-income Americans," Ricketts said. READ MORE

Excerpt from Ethanol Producer Magazine: A coalition of 13 states, led by the Iowa Attorney General Brenna Bird, on April 10 filed a lawsuit with the U.S. Court of Appeals for the Eighth Circuit asking the court to vacate a final rule that revises the petroleum-equivalency factor (PEF) for electric vehicles (EVs), claiming the rule harms ethanol producers and other stakeholders.

The rule, issued by the U.S. Department of Energy in March, revises the procedures for calculating a value of the petroleum-equivalent fuel economy of electric vehicles (EVs). The PEF is used by the U.S. EPA in calculating light-duty vehicle manufacturers’ compliance with the U.S. Department of Transportation’s Corporate Average Fuel Economy (CAFE) standards.

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The petitioners are asking the court to review the PEF rule on the grounds that the rule exceeds DOE’s authority and violates other federal laws. Specifically, the lawsuit claims that DOE lacked statutory authority to improve a fuel-content factor which multiplies the nominal fuel-efficiency of electric automobiles by 6.67; that DOE lacked statutory to apply the revised petroleum-equivalency factor beginning with model year (MY) 2027 because the agency is required to perform an annual review of the petroleum-equivalency factor; that DOE failed to perform the required Environmental Impact Statement under the National Environmental Policy Act; and that DOE’s final rule is arbitrary and capricious and otherwise contrary to law.

“We’re pulling the plug on Biden’s electric vehicle handout,” Bird said. “Biden has made it clear that he will take every avenue possible to wage war on gas-powered vehicles. And Iowa ethanol is getting caught in the crossfire. I’m leading the charge in court to combat Biden’s extremist anti-energy agenda and protect Iowa ethanol and farmers.”

...Arkansas, Florida, Idaho, Kansas, Mississippi, Montana, Nebraska, Ohio, Oklahoma, Texas and Utah and the American Free Enterprise Chamber of Commerce are joining Iowa in challenging the PEF rule. A full copy of the lawsuit is available on the Iowa Attorney General’s website. A full copy of the PEF rule can be found on the Federal Register website. READ MORE