Yesterday federal agencies launched a mid-term review of the Obama administration’s emissions and fuel efficiency standards for passenger cars and light trucks — standards that aim to double these vehicles’ fuel economy to 54.5 miles per gallon and cut GHG emissions in half by 2025.
The Obama administration says this will reduce emissions by 6 billion metric tons over the life of the program — more than the total amount of carbon dioxide emitted by the US in 2010.
The mid-term review kicked off with the highly anticipated Draft Technical Assessment Report, in which the EPA, the National Highway Traffic and Safety Administration (NHTSA) and the California Air Resources Board analyze automakers’ progress toward meeting the federal standards for greenhouse gas emissions and corporate average fuel economy (CAFE).
The report says automakers can meet the model year 2022-2025 standards by implementing a wide range of technologies such as turbo charging, engine downsizing, more sophisticated transmissions, vehicle weight reduction, aerodynamics, and idle stop-start, along with improved accessories and air conditioning systems.
If also finds that manufacturers can meet the standards at similar or even a lower cost than was anticipated in the original 2012 rule. There are more than 100 types of cars, SUVs and pick-up trucks on the market today that already meet 2020 or later standards, the report says — and this could set the stage for more stringent GHG and fuel economy rules in the future.
In 2012, the EPA and NHTSA jointly finalized national greenhouse gas reduction and fuel efficiency standards for new cars and passenger trucks for model years 2017 to 2025. The current standards built on the first phase of standards adopted earlier for model years 2012 to 2016.
To get the automakers and the United Auto Workers union to sign on to the rules, which won broad support from business, health and environmental groups, the federal agencies agreed to conduct a mid-term review.
During the mid-term review, the federal agencies will listen to feedback from the auto industry and the public and then decide whether to revise the targets for model year 2022 to 2025 vehicles. They must decide by 2018.
The auto industry is already warning that these targets will be too costly to the industry and consumers.
“Given changes in the market landscape, it will be a daunting challenge to meet the very aggressive requirements of the 2022-2025 federal fuel economy and greenhouse gas rule,” the Alliance of Automobile Manufacturers said in a statement about the draft technical assessment. “Absent a vigorous commitment to focus on marketplace realities, excessive regulatory costs could impact both consumers and the employees who produce these vehicles.”
The Auto Alliance represents a dozen major automakers with 77 percent of all car and light-truck sales. The group’s president, Mitch Bainwol, told the Washington Post: “Looking a decade out, it’s clear that compliance with the existing targets will be exceedingly difficult and expensive.”
While the automakers have not specifically called on the agencies to weaken the standards, they have cautioned that consumer are reluctant to buy the smallest, most fuel-efficient cars. In the weeks leading up to the mid-term review the Auto Alliance released its own set of recommendations calling on the federal agencies to review how low fuel prices have affected the standards and consumers’ car-buying buying preferences.
Environmental groups, on the other hand, argue that the standards are attainable and say they will improve fleet owners’ and manufacturers’ bottom lines while also improving air quality.
“Addressing the threat of climate change is the race of our lives, and we can’t win the race unless we’re driving the cleanest possible cars,” said Environmental Defense Fund president Fred Krupp.
EDF points out that, according to the Consumer Federation of America, the Ford-150, the most popular passenger truck in the US, has models that already meet standards for 2021, as do the Toyota Rav4, Chevy Malibu hybrid and Chevy Cruze. The 2014 Toyota Highlander meets standards for 2020.
“Fuel efficiency gains have been an incredible boon to our economy,” said Ceres’ transportation program director Carol Lee Rawn.
In a statement about the midterm review, Rawn added: “It’s important to maintain the integrity of fuel economy standards, which increase fuel saving technology sales by suppliers, provide the market certainty needed to drive investment in the development of these technologies, and help to ensure future US leadership and competitiveness.”
Late last month Ceres released an economic analysis, prepared by independent automotive industry analysts and commissioned by the sustainability nonprofit, that found US automakers will remain profitable and suppliers will benefit if existing national fuel economy standards are retained.
The analysts modeled five fuel price scenarios to project what would happen to automakers’ profits and suppliers’ orders if current fuel-efficiency targets requiring real-world fleet averages of 37 to 39 miles per gallon by 2025 were to stay in place, and what would happen if the government were to weaken the standards during the midterm review.
“In all of our fuel price scenarios (from very low to high), the auto industry would be profitable if current standards stay in place,” said Alan Baum, one of the brief’s authors and principal of the automotive forecasting and research consultancy Baum & Associates. “According to our research, weakening the standards could hurt the bottom line for automakers and their suppliers because their vehicles may be less competitive than those offered by other automakers.”
In announcing the EPA and NHTSA’s draft report, Janet McCabe called the finding “great news for consumers, manufacturers, workers and the climate.
“Today’s draft report shows that automakers are developing far more technologies to improve fuel economy and reduce greenhouse gas emissions, at similar or lower costs, than we thought possible just a few years ago,” McCabe said in a statement. “And they are adopting these fuel-saving technologies into their fleets even faster than anticipated.”
Added National Highway Traffic Safety Administrator Dr. Mark Rosekind: “The draft report supports that the administration’s fuel economy program can continue to incentivize innovation and reduce fuel consumption while also ensuring that consumers can continue to choose the vehicles they want to drive.”
The jockeying between automakers and environmental groups will undoubtedly intensify now that the mid-term review has begun. But judging from the federal agencies’ praise for the standards and the car manufacturers, it seems likely the clean car rules will remain intact.