Executives from 10 auto companies will meet with President Donald Trump and cabinet officials on Friday to discuss the administration’s plan to reduce gas mileage and pollution requirements enacted during the Obama administration.
The auto industry wants to relax the standards, but not so much that they provoke a legal fight with California, which has power to impose its own stricter tailpipe pollution limits. Such a fight could bring two mileage standards in the U.S., forcing automakers to engineer and produce two versions of each of their vehicle models, driving up costs.
“The president will hear from the automaker CEOs about the impact of the rulemaking on the auto industry and their efforts to negotiate a ‘National Program’ with the state of California,” Lindsay Walters, deputy White House press secretary, said in a statement.
In testimony before a congressional committee this month, Mitch Bainwol, CEO of the Alliance of Automobile Manufacturers, said the trade group has urged the Trump administration to find a solution that increases mileage requirements from 2022 to 2025 and includes California in order to keep one national standard.
“The resulting regulatory nightmare would ultimately harm consumers by increasing vehicle costs and restricting consumer choice,” Bainwol said.
If California splits from the federal rule, it likely would be joined by 12 states that follow its standards. Together they make up about 40 per cent of U.S. new-vehicle sales.
The Environmental Protection Agency under Trump has proposed freezing the standards at 2020 levels for the next five years, according to a draft of the proposal obtained by Sen. Tom Carper, D-Delaware. Under the proposal, the fleet of new vehicles would have to average roughly 30 miles per gallon in real-world driving, and that wouldn’t change through at least 2025.
The EPA under Obama proposed standards that gradually would become tougher during that period, rising to 36 mpg in 2025, 10 mpg higher than the current requirement. California and automakers agreed to the rules in 2012, setting a single national fuel economy standard.
Any big change by Trump certainly will bring lawsuits from environmental groups as well as California. Leaks about the Trump EPA plan already have provoked a suit from California and 16 other states.
Automakers have been lobbying the Trump administration to revisit the requirements, saying they’ll have trouble reaching them because people are buying bigger vehicles due to low gas prices.
When the single national standard was adopted six years ago, cars, which get better mileage than trucks and SUVs, made up just under half of U.S. new vehicle sales. By the end of last year, however, trucks and SUVs were close to two-thirds of all sales.
Some environmental groups oppose any reduction in the standards, saying that the ones developed in 2012 allow for changes in consumer buying habits. Reducing the standards, they say, will increase pollution and raise gasoline prices at the pump.
Requirements now are lower for bigger vehicles such as trucks and SUVs, said Luke Tonachel, director of clean vehicles for the Natural Resources Defence Council. “The standards automatically adjust to the sales mix of vehicles,” he said.
Environmental groups also say the industry marketed trucks and SUVs to the public because they make bring higher profits than cars.
Daniel Becker of the Safe Climate Campaign, an environmental advocacy group, said the new EPA proposal may go further than the industry wanted, giving it a black eye from the public and creating two mileage requirements.
“The auto companies want the rollbacks, but they don’t want the blame,” Becker said.
California has a unique waiver that allows it to set its own tailpipe emissions standards for vehicles, which it has used to combat smog and, more recently, global warming. Thirteen other states and the District of Columbia have adopted the California standards as their own. Vehicles that get better mileage burn less gas and spew out fewer greenhouse gases.
The Trump administration has discussed ending the California waiver, but the state has pledged to defend it in court.
There may be room for compromise. Mary Nichols, chair of the California Air Resources Board, has said that there may be a way to recognize the auto industry’s concerns without doing much damage to the standards. She has said the state may go along with new flexibility for the industry in exchange for extending standards to at least 2030.
Auto executives attending the meeting include General Motors CEO Mary Barra, Ford CEO Jim Hackett, Fiat Chrysler CEO Sergio Marchionne and Bob Carter, executive vice-president of North America for Toyota.