EPA Sends Vehicle Emissions Reduction Plan to White House for Review

January 22, 2024

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by David Shepardson (Reuters) The U.S. Environmental Protection Agency (EPA) sent to the White House for review its proposal to finalize sweeping emissions cuts for new cars and trucks through 2032 that could drastically boost electric vehicle sales, a document made public on Friday shows.

The EPA in April proposed requiring a 56% reduction in projected fleet average emissions over 2026 model year requirements.

Under the initial EPA proposal, automakers are forecast to produce 60% EVs by 2030 and 67% by 2032 to meet requirements.

A group representing major automakers has called the EPA plan "neither reasonable nor achievable" while environmentalists, electric vehicle maker Tesla (TSLA.O) and many Democratic lawmakers want the agency to finalize tougher requirements. The EPA plans to finalize its new emissions rules by March.

The draft final rule, sent late on Thursday to the White House Office of Information and Regulatory Affairs, is undergoing interagency review after more than 250,000 public comments were filed, the EPA said on Friday.

The EPA proposal is one of three major proposed vehicle rules under consideration by the EPA, Transportation (DOT) and Energy departments that could dramatically impact what Americans drive.

Last month, a group representing major automakers urged the Biden administration to make significant changes to the three proposed rules, warning they could force car companies to hastily stop building some gas-powered vehicles.

The Alliance for Automotive Innovation warned the proposed rules "could prematurely force abandonment of many internal combustion engine vehicles and their associated revenue."

The alliance represents General Motors (GM.N), Toyota Motor (7203.T), Volkswagen (VOWG_p.DE), Ford Motor (F.N) Stellantis (STLAM.MI), and others.

Deputy Transportation Secretary Polly Trottenberg on Thursday said the three agencies are "certainly trying to talk to each other and figure out a way to do this" to achieve climate goals in a way that works for the auto industry.

Automakers have been sounding the alarm about the proposed rules, warning they could result in $14 billion in fines, including $6.5 billion for GM and $3 billion for Stellantis.

The DOT's National Highway Traffic Safety Administration in July proposed hiking Corporate Average Fuel Economy (CAFE)standards by 2032 to a fleet-wide average of 58 miles per gallon by boosting requirements 2% per year for passenger cars and 4% annually for pickup trucks and SUVs. U.S. automakers want the increase for light trucks cut to 2% annually.

The Energy Department has proposed revising how electric vehicles are treated for compliance purposes, with automakers saying it would devalue EV fuel economy by 72%. READ MORE

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Industry Backing For EPA Auto Rule May Hinge On Easing Early Standards (Inside EPA)
How a geeky calculation could weaken 2 clean car rules (E&E News Climatewire)

Excerpt from E&E News Climatewire: The Biden administration is about to release two major rules to expand electric vehicles and make gas-powered cars run cleaner.

But a third rule could undercut those efforts.

A regulation being finalized by the Department of Energy would revise formulas that translate the power consumption of an electric car into gasoline use, or the miles per gallon equivalent. DOE proposed slashing the estimated fuel economy of electric cars and trucks last year, then announced in the fall it would accept more comments on the idea.

That gave carmakers a second chance to plead their case for easing the rule, prompting concern among climate and consumer advocates that the administration might soften the DOE proposal and allow auto manufacturers to keep making gasoline-gulping models.

The formula — known as the petroleum equivalency factor — determines how electric cars are scored under the corporate average fuel economy standards, a separate rule that’s being updated by the National Highway Traffic Safety Administration. The old standard gave credit to carmakers for each EV they produced, allowing them to offset the high fuel consumption of gas guzzlers.

Lowering the mpg equivalency for EVs could force car companies to make fewer gas-gulping SUVs, trucks and vans because the average fuel economy of their entire fleet would fall.

Here’s one example: The proposed DOE petroleum equivalency factor, or PEF, would reduce the fuel economy rating of Ford’s F-150 Lightning from 238 mpg to 67 mpg. It calls for similar decreases on other models.

If it’s weakened, leaving EVs with a higher estimate of their fuel economy, it could mean that automakers don’t have to increase the efficiency of their gasoline-powered cars as much to meet fleetwide average fuel economy standards.

...

The EPA rule for light- and medium-duty vehicles gradually lowers the amount of carbon new vehicles are allowed to emit on a fleetwide average basis and is expected to prod carmakers to electrify 67 percent of their new vehicles by 2032. That does a lot to encourage companies to invest in electric vehicles but very little to ensure that gasoline-powered models they still sell get good gas mileage.

NHTSA’s proposal on CAFE standards would raise the fleetwide average from 46.7 mpg in 2026 to 57.8 mpg in 2032. It would effectively backstop EPA’s rule, ensuring that in years when there are fewer electric offerings, new vehicles with internal combustion engines still meet fuel economy minimums.

An NHTSA spokesperson declined to comment on DOE’s petroleum equivalency factor but said the agency plans to release the CAFE standard soon. The White House did not respond to requests for comment.

EPA said in an email that it couldn’t comment on the clean car rule because it’s under review.

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The Detroit Three — General Motors, Ford and Stellantis — face the highest hurdles related to the new calculations, because they build and sell a broad range of vehicles — including gas-guzzling vans, trucks and SUVs. They also make EVs to help balance the fuel economy of their massive fleets.

The three companies argued in joint comments that they were counting on getting credit for their EV production to bring them into compliance with the higher CAFE standards that NHTSA is expected to finalize. Failure to meet those standards could result in thousands of dollars in fines for each vehicle.

Other carmakers, such as Toyota and Hyundai, produce a mix of smaller cars and hybrids, making it easier for them to meet the higher fuel economy rules — even without generous crediting for electric vehicles.

That “disproportionate impact” on U.S. carmakers, the Detroit Three argued, “must be remedied, not only by DOE in its rulemaking, but also by NHTSA in its rulemaking.” READ MORE