Carmakers, environmentalists gear up for mpg fight

Keith Laing, Detroit News Washington Bureau
11:02 p.m. EDT July 29, 2016

Washington – A projection from federal regulators that U.S. automakers probably will miss the 54.5 miles-per-gallon fleetwide average for 2025 is likely to touch off an intense lobbying fight between automakers and environmentalists.

Automakers have seized upon the projection, which stated they may only be able to achieve a fleet-wide average of between 50 and 52.6 mpg by the deadline that was set by the Obama administration in 2012. They argue that federal regulators should consider scaling back the stringent mileage rules when they come up for a mid-term review in 2018.

They say the lowered mileage projections reflect the fact that customers prefer larger vehicles like SUVs and trucks.

“Adding technology and regulatory costs that lock buyers out of new cars is counterproductive,” said Wade Newton, director of communications at the Washington, D.C.-based Alliance of Automobile Manufacturers, which represents Fiat Chrysler Automobiles, Ford Motor Co., General Motors Co., BMW Group, Jaguar Land Rover, Mazda, Mercedes-Benz USA, Mitsubishi Motors, Porsche, Toyota, Volkswagen Group of America and Volvo Car USA.

“It also risks manufacturing jobs in the Midwest and the South.”

Environmentalists have countered that automakers have plenty of time to ramp up the fuel efficiency of their auto fleets before the 2025 deadline, pointing to the fact that the mileage rules were crafted to include a mix of cars and trucks.

“Our feeling is about the (draft Technical Assessment Report) is that it underscores how well the standards are working,” said Zoe Lipman, Senior Policy Advisor at the BlueGreen Alliance. “They are designed to work with the market and with consumer preference.”

Lipman added that the lowered gas mileage projections from federal regulators are “simply one output of their modeling.” She said that new rules will help reduce the amount of pollution in the nation whether or not automakers hit the 54.5 mpg target.

“We’re seeing re-investments, jobs are coming back at plants that are building trucks (and) building SUVs, which means a revival in the automotive market,” Lipman said. “Each type of car must get much more fuel efficient.”

The debate will likely not be settled until 2018, when regulators at the Department of Transportation and U.S. Environmental Protection Agency conduct a mid-term review of the gas mileage rules.

The potential decrease in the mileage rates of U.S. automakers is attributed in part to gas prices that have been lower than anticipated when the mileage rules were crafted in 2012. Even though automakers may be able to build cars that meet the toughest fuel standards, customers have been buying SUVs and trucks — and it’s the overall average of vehicles sold that counts.

The proposed gas mileage rules, known as Corporate Average Fuel Economy (CAFE) standards, are beginning to take effect with the 2017 model year. They call for ramping up from the current fleet-wide average of about 34 miles per gallon for cars and trucks that were required in 2016 to the eventual goal of more than 50 mpg by 2025.

The increase starts with a rise to an average of more than 35 mpg for the 2017 models that already are being rolled out. They gradually rise to 41 mpg by 2021.

If the rules for model years after 2021 are left in place when they come up for review in 2018, the mileage standard will increase to about 43 mpg combined for cars and trucks in 2022, before jumping to about 45 mpg in 2023. The final years of the mandate will see a required average of about 47 mpg in 2024, and finally more than 55 mpg for cars and about 40 mpg for trucks in 2025.

Auto companies that do not meet the higher emission standards will be fined $5.50 for each one-tenth of a mile-per-gallon their average fuel economy falls short of the standard for a model year, multiplied by the total volume of vehicles that are in the fleet that fail to meet the new requirements.

National Highway Traffic Safety Administrator Mark Rosekind and Acting Environmental Protection Agency Assistant Administrator for the Office of Air and Radiation Janet McCabe said automakers have already stepped up to the challenge of improving the fuel efficiency of vehicles that are on the nation’s roadways.

“We are seeing technologies that reduce emissions and improve fuel economy entering the fleet at faster rates than originally expected,” they wrote. “These technologies include turbocharging, engine downsizing, more sophisticated transmissions, vehicle weight reduction, aerodynamics and idle stop-start, along with improved accessories and air conditioning systems.

Newton, the auto alliance spokesman, said the lowered mileage projections may indicate that federal regulators are gearing up to bow to market realities when they conduct the mid-term review in 2018, however.

“The 2025 fuel economy/greenhouse gas targets now reflect changes in the fleet mix, and that fleet mix change is largely the result of low gas prices,” he said. “That’s something the government acknowledges impacts consumer sales, and the effect of those sales on automakers hitting these aggressive targets.”

Lipman, the BlueGreen Alliance policy advisor, countered that regulators should consider that the mileage rules are already paying dividends for the environment.

“In 2010, the average fuel economy was 27 miles per gallon, and we’re arguing about whether we’re going to get to 52 or 54?” she said. “That’s madness.”

http://www.detroitnews.com/story/business/autos/2016/07/29/carmakers-environmentalists-gear-mpg-fight/87762138/

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