In partnership with the U.S. Department of Transportation, the Environmental Protection Agency recently announced that it would accept public comment on the tough fuel-economy standards initiated by the Obama administration. The review follows through on a Trump administration promise to reexamine rules that had been implemented on an accelerated timeline, which some industry groups had called out as unfair.
The current rules, introduced in 2012, call for a Corporate Average Fuel Economy of 54.5 miles per gallon to be reached by 2025, although real-world fuel economy numbers would be lower. Originally they included a midterm review of the 2012 standards that would cover the 2022–2025 vehicle model years, but the Trump administration expanded the review to include the 2021 model year as well. The reopening of the review has garnered criticism from environmentalists and consumer groups, both of which claim that the market will demand more fuel-efficient vehicles in the future. Manufacturers have been a bit more vague on the subject.
“By reopening the midterm evaluation, EPA is bringing back questions that have already been asked and answered,” Shannon Baker-Branstetter, policy counsel for Consumers Union, the nonprofit advocacy organization behind Consumer Reports, said in a statement. “In fact, EPA concluded a thorough assessment earlier this year that found the targets through 2025 could be met at an even lower cost than EPA had previously estimated.”
Differing Arguments on Effect to Consumers
The Natural Resources Defense Council said fuel savings would outweigh the cost of reducing tailpipe emissions, estimating that a vehicle meeting the existing 2025 standards would save its owner about $4000 over the ownership term of a vehicle that meets current fuel-economy standards.
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“”We want to increase public participation, listen to those impacted directly by our regulations and use the best available information and data to inform our regulatory actions.”
— Scott Pruitt, EPA Administrator
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For its part, the Alliance of Automobile Manufacturers, the industry’s leading advocacy group in the United States, lauded coordination between DOT and EPA, saying collaboration between the two agencies would help bring the most current data into decisions about future fuel-economy standards. “With this announcement, the administration is fulfilling its commitment to reinstate the midterm evaluation of future vehicle fuel economy and greenhouse-gas standards,” Mitch Bainwol, president and chief executive of the Alliance, said in a statement. “This review is important to consumers nationwide who want government to rely on the facts to drive improvements in fuel economy.”
When the current CAFE rules were introduced, in 2012, the U.S. auto industry was still piecing itself back together in the wake of the economic crisis and—for General Motors and Chrysler—a massive federal bailout. With fuel prices at an all-time high and demand for fuel-efficient vehicles up, the Obama administration pushed for tighter fuel-economy regulations and more investment in alternative-fuel vehicle development. Fuel prices have since dropped significantly, and hybrid and plug-in electric-vehicle sales have remained lackluster, hovering around 2 percent of the total vehicle market.
Trump’s EPA says it will, by April of next year, determine whether or not the standards set forth by the Obama administration are appropriate. If not, it will initiate another public comment period.
“We are moving forward with an open and robust review of emissions standards, consistent with the time-frame provided in our regulations,” said EPA administrator Scott Pruitt, in a statement. “We want to increase public participation, listen to those impacted directly by our regulations and use the best available information and data to inform our regulatory actions.”
In a recent survey of American consumers, Consumers Union found that—despite current low fuel prices—87 percent of the people it interviewed thought that automakers should continue to improve vehicle fuel economy. Nearly three quarters of respondents thought the government should require higher standards, and almost 80 percent agreed that large vehicles should be more fuel efficient, and that increasing average real-world fuel economy from its current 25 miles per gallon to 40 mpg by 2025 was a worthwhile goal.
“Even with low gas prices, consumers still want fuel economy to improve, including in larger vehicles,” Baker-Branstetter said in June, when the survey results were published. “Automakers should pay attention to these findings and develop more efficient vehicles to give consumers what they want.”
Tougher Targets Could Help the Industry?
In a report published a few days before EPA made its joint announcement with DOT, Ceres, a sustainability-oriented advocacy organization, published an analysis of the automotive industry pointing to how increasing fuel economy standards in the future would help the automotive industry, business-wise. The report notes that since 1985, when American automakers exported only a third of their vehicles outside North America, the number of exports has risen to two thirds of total output. In markets such as Europe and China, government requirements and consumer demand call for more efficient vehicles.
“Given the major trends affecting the industry going forward, weakening the current fuel economy standards would in fact be detrimental to the future competitiveness of U.S. automakers and their suppliers,” Alan Baum, author of the analysis, said in a statement, adding that new car demand would fall off after two straight years of record sales. “Our analysis suggests that investors remain skeptical of automakers as sales decline from peak levels, as well as their ability to adapt to new options in personal mobility. Innovation, especially in fuel efficiency and electric vehicles, will be key to thriving in this new world.”
Go here for more information on how to submit comments to EPA regarding fuel economy rules.
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