Liquid Fuels, Enviros File First Lawsuits over Fuel Economy Rule

June 27, 2024

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by Alex Guillen (Politico Pro) Leading oil and biofuel groups and a litany of auto dealers have challenged the Transportation Department’s new fuel economy rule in the U.S. Court of Appeals for the 5th Circuit.

That sets up a lottery to determine whether the case will be heard in the New Orleans-based conservative-leaning court, which has been hostile to many Biden administration regulations, or instead in the D.C. Circuit. The Sierra Club on Monday filed suit in that capital-based court, which handles the bulk of regulatory challenges — including challenges to Biden’s prior fuel economy rule.

Background: The rule finalized by the National Highway Traffic Safety Administration earlier this month, Reg. 2127-AM55, requires increases in fuel economy standards for light-duty cars and trucks for model years 2027 through 2031.

The final version backed off of more stringent gains from the proposal for gas-guzzling SUVs and pickup trucks, instead giving that class of vehicle lesser requirements than passenger cars. NHTSA said that was so automakers could focus their resources on transitioning to electric vehicles, the market for which is growing, rather than gasoline- and diesel-powered engines. READ MORE

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Red states go to court over Biden fuel efficiency standards: The lawsuit targets a rule the administration had already walked back due to automakers' concerns. The oil industry and environmental groups are also suing. (Politico Pro Climatewire)
API, enviros sue over Biden fuel economy rules: The lawsuit is the third the oil industry trade group has filed in recent weeks against the administration's climate rules for vehicles. (Politico Pro Greenwire)
Regan confident on tailpipe rule despite other legal setbacks for EPA (Politico Pro)
Farmers, Car Dealers and Oil Companies Sue Over EV Push (Energy.AgWired.com)
Republican state AGs challenge new US fuel economy rules (Reuters)
Fuel economy legal fight lands in 6th Circuit (Politico)

Except from Politico Pro Climatewire: Twenty-six Republican state attorneys general are challenging a new federal fuel economy rule, claiming that the Biden administration is seeking to drive gas-powered vehicles off the road.

Patrick Morrisey of West Virginia and Russell Coleman of Kentucky led the effort, filing a lawsuit Wednesday in the 6th U.S. Circuit Court of Appeals to block the National Highway Traffic Safety Administration's corporate average fuel economy, or CAFE, standards.

The the oil industry and environmental groups have also sued over the NHTSA standard for model year 2027-2032 passenger cars and light-duty trucks. The lawsuits have been filed in three federal courts, ensuring a judicial lottery to determine which bench will hear the case.

Morrisey, Coleman and other Republican attorneys general say they will argue that the NHTSA rule requires auto manufacturers to dramatically increase the average fuel economy of passenger cars and light trucks in less than a decade. And they say the rule forces a transition to electric vehicles while increasing costs for families and undermining the reliability of the electric grid. READ MORE

Excerpt from Politico Pro Greenwire: The American Petroleum Institute is challenging the Biden administration’s latest rule for tailpipe emissions, arguing that the standard appears designed to phase out gas-powered vehicles.

In a lawsuit filed Wednesday in the 5th U.S. Circuit Court of Appeals, the oil industry group is seeking to strike down the National Highway Traffic Safety Administration’s fuel efficiency standard for model year 2027-2032 passenger cars and light-duty trucks.

The lawsuit comes as API this month has led two lawsuits challenging EPA tailpipe emissions standards for light-duty and heavy-duty vehicles.

“American consumers are now facing a slew of unreasonable vehicle mandates that will only restrict choices and make it harder to afford new cars and trucks at a time of persistent inflation,” said API Senior Vice President and general counsel Ryan Meyers.

Meyers called NHTSA’s efforts “yet another attempt to circumvent Congress and effectively ban new vehicles using liquid fuels that American drivers rely on every single day.” READ MORE

Excerpt from Politico Pro: EPA Administrator Michael Regan said Thursday he’s “not at all” concerned about the agency’s embattled rules aimed at cutting emissions from the transportation sector, despite two Supreme Court rulings earlier in the day that could limit the agency’s regulatory and enforcement authorities.

Agency officials “very carefully” designed the regulations in consultation with industry and unions, Regan told reporters after a speech to employees at agency headquarters.

“I’m very confident that our tailpipe emission standard can achieve its environmental goals through a combination of control technologies that are available to the automobile industry,” he said. “That’s why [the automakers] stood with us when we announced it. And quite frankly, the unions stood with us because there are jobs there as well.”

Since it was finalized in March, the rule, Reg. 2060-AV49, has drawn eight lawsuits from red states, fossil fuel, biofuels and agriculture groups. The corresponding rule for heavy-duty trucks, Reg. 2060-AV50, is also facing a litany of industry challenges in court. READ MORE

Except from Reuters: A group of 26 state attorneys general led by West Virginia and Kentucky on Wednesday challenged the Biden administration's new fuel economy rules, calling the requirements unworkable and saying they would force automakers to build more electric vehicles.

The National Highway Traffic Safety Administration earlier this month finalized tighter vehicle fuel economy rules through 2031 that are significantly less stringent than first proposed.

NHTSA said it would hike corporate average fuel economy (CAFE) requirements to about 50.4 miles per gallon (mpg) by 2031 from 39.1 mpg currently. The new requirement is barely above the 49 mpg it previously required for 2026.

Republican state attorneys general and oil industry groups have challenged a number of regulatory efforts by the Biden administration to boost vehicle efficiency, reduce greenhouse gas emissions and increase EVs, while Republican presidential candidate Donald Trump has vowed to rescind the Biden administration's EV regulations.

The lawsuit by the state attorneys general, filed in the 6th Circuit U.S. Court of Appeals, argues that the rule "exceeds the agency’s statutory authority and otherwise is arbitrary, capricious, an abuse of discretion, and not in accordance with law."

NHTSA did not immediately comment.

In July 2023, NHTSA proposed boosting CAFE requirements by 2% per year for passenger cars and 4% per year for light trucks from 2027 through 2032. The final regulation, however, has no increase for light trucks for 2027 and 2028 and will require only 2% increases from 2029 through 2031. READ MORE

Excerpt from Politico: Lawsuits over the Transportation Department's fuel economy rule for 2027 through 2031 model years, Reg. 2127-AM55, will be heard in the Cincinnati-based U.S. Court of Appeals for the 6th Circuit. While suits to the prior Biden fuel economy rule were heard in the D.C. Circuit, there was a bit of a venue race for where this rule would be challenged. Environmental groups angry that the final rule eased up on requirements for SUVs and trucks filed suits in the 1st, 2nd and D.C. Circuits, all more liberal-leaning. Meanwhile, industry groups and red states who argue the rule will “effectively ban new vehicles using liquid fuels” filed suits in the 5th, 6th and 8th Circuits, all of which lean more conservative. But on Friday, the Judicial Panel on Multidistrict Litigation held a random lottery and determined all the cases will be consolidated in the 6th Circuit. Challenges to EPA's related but separate tailpipe emissions rule will be heard in the D.C. Circuit because of the Clean Air Act's provision requiring nationally applicable rules be heard specifically there. READ MORE