trending Market Intelligence /marketintelligence/en/news-insights/trending/eROnYA-FAC2sLMumGW038A2 content esgSubNav
In This List

US EPA plans to finalize Obama-era fuel economy freeze by March 2019

Blog

Insight Weekly: US stock performance; banks' M&A risk; COVID-19 vaccine makers' earnings

Video

S&P Capital IQ Pro | Powered by Expert Insights

Blog

Insight Weekly: LNG exports surge; investors unfazed by inflation; neobanks drive VC funding

451 Research Podcast

Next in Tech | Episode 41: IoT's Role in Energy and Utilities


US EPA plans to finalize Obama-era fuel economy freeze by March 2019

The U.S. Environmental Protection Agency aims to finalize a rule that would freeze Obama-era fuel economy standards for cars and light-duty trucks by March 2019, according to the agency's fall regulatory agenda released Oct. 17.

The proposed rule was released on Aug. 2 by the EPA and the U.S. Transportation Department's National Highway Traffic Safety Administration, or NHTSA, and a public comment period will conclude on Oct. 23. The proposal has already teed up a legal battle between the federal government and a number of states, led by California, over their right to adopt higher Corporate Average Fuel Economy, or CAFE, standards.

The federal government agreed to align its fuel economy standards with California's more stringent requirements under a deal the Obama administration reached with California and automakers following the auto industry bailout in 2009. As part of the agreement, the EPA in January 2017 required automakers to raise the CAFE standards for cars and light-duty trucks to an average of 54.5 miles per gallon for model years 2022 through 2025.

Under the Trump administration, the EPA and NHTSA, which each regulate vehicles for emissions, are now proposing to decouple those standards and seek to establish a new nationwide standard for the model years 2021 through 2026. The agencies have said the preferred alternative set forth in the proposed rule "reflects a balance of safety, economics, technology, fuel conservation, and pollution reduction." According to their estimates, the proposal will result in a reduction of up to 1,000 lives lost annually in fatal vehicle crashes and yield $2,340 in savings on the average ownership cost of new vehicles.

But regulators who sit on the 16-member California Air Resources Board, or CARB, argue the stricter standards are essential to reducing the state's greenhouse gas emissions. The Los Angeles Times reported that CARB voted Sept. 28 to require automakers to comply with California's strict rules on car and truck pollution if they want to sell vehicles in the state. At the CARB meeting, members were presented with an analysis that showed the federal proposal would cause 12 million tons of additional greenhouse gas emissions to be released in the state by 2030.