Steel Markets

Emissions Rollback Proposal Causes Stir

Written by Sandy Williams

Emission standards set by the Obama administration in 2012 are now on the chopping block by the Trump administration. Last week the Environmental Protection Agency and Department of Transportation submitted a proposal to roll-back emission standards that are set to take effect after 2020 and freeze them at the pre-2020 levels.

“We are delivering on President Trump’s promise to the American public that his administration would address and fix the current fuel economy and greenhouse gas emissions standards,” said Acting EPA Administrator Andrew Wheeler in a statement.

Fuel standards were to increase to 41.7 average miles per gallon for 2020 vehicles and 54.5 miles per gallon in 2025 models. The proposal would freeze emission standards for light-duty vehicles to 37 miles per gallon. Trump says states will be prohibited from setting their own stricter regulations, which has Californians outraged.

California was provided a waiver by the EPA in 2013 under the federal Clean Air Act that allowed it to establish its own standards for emissions and air quality. Until now, California standards were aligned with those set by the Obama administration. Eighteen states follow California’s lead to combat air pollution and greenhouse gas emissions, including moving toward hybrid and electric vehicles.

The administration says rolling back the standards will give “American people greater access to safer, more affordable vehicles that are cleaner for the environment.” 

“The current standards have been a factor in the rising cost of new automobiles to an average of $35,000 or more—out of reach for many American families. Indeed, compared to the preferred alternative in the proposal, keeping in place the standards finalized in 2012 would add $2,340 to the cost of owning a new car, and impose more than $500 billion in societal costs on the U.S. economy over the next 50 years,” wrote the EPA in its announcement of the proposal.

According to a study by the National Highway Traffic Safety Administration, older vehicles are proportionately related to higher incidents of fatality in crashes. Freezing the standards would eliminate the additional costs of owning a new car, prompting more purchases and saving lives.

It would also increase U.S. oil consumption by 2-3 percent to about 500,000 barrels a day by 2030, while also reducing the percentage of hybrid vehicles needed to comply with the original standards from 56 percent to 3 percent. A fact sheet released by the departments gives further details.

Sen. Tom Carper (D-Del.) said in a statement, “This administration has, once again, ignored the obvious right answer and decided to listen to the most extreme voices as it pushes through a plan that no one is interested in — with the exception of the oil industry, perhaps.” Carper said that rolling back the standards would make American cars less competitive in a global market that is moving toward more efficient vehicles.

The American Fuel and Petrochemical Manufacturers trade group supports the EPA proposal and urged changes to the standards in a June meeting with White House officials. “We come from a free-market perspective, where we believe consumers should have a choice in their vehicles, and they can weigh all the appropriate factors — be it size, horsepower, utility, or fuel economy,” said Derrick Morgan, senior vice president of the group. “We trust individual consumers to make the right decisions; we don’t think Washington or Sacramento should be making all those determinations.”

The American Petroleum Institute has not officially weighed in on the rollback of fuel standards, but in June addressed a plea from the Auto Alliance to Washington to increase incentives and subsidies for zero emission vehicles. “Contrary to the intent of the Auto Alliance’s May 31st letter, we believe that the letter should serve as a cautionary tale of continuing to allocate resources to a technology that is consistently rejected in the marketplace by the vast majority of your constituents,” responded API.

The Auto Alliance and Global Automakers said the proposal calls for “substantive negotiations to begin.” In a joint statement the associations wrote: “Automakers support continued improvements in fuel economy and flexibilities that incentivize advanced technologies while balancing priorities like affordability, safety, jobs and the environment. With today’s release of the administration’s proposals, it’s time for substantive negotiations to begin. We urge California and the federal government to find a common sense solution that sets continued increases in vehicle efficiency standards while also meeting the needs of America’s drivers.”

California has threatened to sue the government in order to protect its air quality. On Aug. 7, the state issued a proposal for adoption of its own regulations and a rebuttal of the EPA/NHTSA proposal. “Proposals to weaken the U.S. EPA program or to preempt California’s program or to withdraw waivers are entirely legally unfounded, unsupported by the evidence, and contrary to the core structure of the federal Clean Air Act and decades of precedent. They threaten public health and undermine California’s sovereign responsibilities to protect the public,” said the state report.

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