Published 2:48 p.m. ET April 2, 2018
Washington — President Donald Trump’s administration is moving to overturn stringent gas mileage rules that would have required automakers to produce car fleets that averaged over 50 miles per gallon by 2025.
U.S. Environmental Protection Agency Administrator Scott Pruitt said Monday the mileage rules – known as Corporate Average Fuel Economy standards — are “not appropriate and should be revised” in a determination announced Monday. The stringent CAFE standards were set under President Barack Obama’s watch.
“The Obama administration’s determination was wrong,” Pruitt said in a statement, referencing the Obama administration’s decision to finalize the standards ahead of schedule in the months after Trump’s win in the 2016 election.
“Obama’s EPA cut the midterm evaluation process short with politically charged expediency, made assumptions about the standards that didn’t comport with reality, and set the standards too high,” Pruitt said.
The Trump administration did not annouce what the recommendations for the new standards will be.
Pruitt said the EPA will launch a new rulemaking process to craft new mileage rules for the model years between 2022 to 2025. The decision is a major win for automakers, who argued that the Obama-era rules were too stringent and pushed the Trump administration to revive the mid-term review they promised that was supposed to conclude in April 2018.
Gloria Bergquist, vice president of communications and public affairs for the Alliance of Automobile Manufacturers, which lobbies for major carmakers in Washington, said the EPA made the “right decision.”
“We support the administration for pursuing a data-driven effort and a single national program as it works to finalize future standards,” she said in an emailed statement. “We appreciate that the administration is working to find a way to both increase fuel economy standards and keep new vehicles affordable to more Americans.”
The fuel economy rules were enacted in 2012 and began taking effect with the 2017 model year. They called for ramping up from the current fleet-wide average of about 35 miles per gallon for cars and trucks to an eventual goal of between 50 and 52.6 miles per gallon by 2025. The goal was revised down from an initial target of 54.5 miles per gallon.
The mileage rules were put in place by the Obama administration when gas prices topped $4 per gallon. Automakers have since argued that the rules are too stringent, and drivers have demonstrated in recent years that they are less interested in fuel-efficient cars and electric vehicles with gas prices that are now around $2.50.
The Obama administration’s mileage rules for the models years between 2017 and 2021 were locked in place by the 2012 agreement that was struck between the former president and almost every major automaker. The first half of the mileage increase required an average of over 35 miles per gallon for 2017 models. The mileage rules then called for automakers to achieve a fleetwide average mileage rate of more than 36 miles per gallon for cars and trucks in 2018. The standard increases to more than 37 miles per gallon in 2019 and nearly 39 miles per gallon in 2020.
Under the Obama administration’s rules, automakers would have faced fines of $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 sold. Automakers were allowed to purchase credits from other auto companies that have come in under the mileage requirements to cover pollution deficits.
The EPA’s decision to roll back the mileage rules sets up a fight between the Trump administration and California, which sets its own emissions standards under a waiver included in the 1970 Clean Air Act.
Mary Nichols, chairwoman of the California Air Resources Board, which worked with the EPA under Obama to craft the national mileage rules, vowed Monday to fight the Trump administration’s effort to roll them back.
“This decision takes the U.S. auto industry backward, and we will vigorously defend the existing clean vehicle standards and fight to preserve one national clean vehicle program,” Nichols said in a statement. “California will not weaken its nationally accepted clean car standards, and automakers will continue to meet those higher standards, bringing better gas mileage and less pollution for everyone.”
Environmental and consumer advocates also accused the Trump administration of acting on behalf of carmakers instead of drivers and ignoring concerns about auto pollution.
“Rolling back these standards means more dangerous pollution will be pumped into the air Michigan families breathe every day,” Lisa Wozniak, executive director of the Michigan League of Conservation Voters, said in a statement.
David Friedman, director of cars and products policy and analysis for Consumers Union, said the Trump administration’s decision “defies the robust record and years of review that show these targets are reasonable and appropriate.
“Undermining these consumer protections will cost consumers more at the pump while fulfilling the wishes of the auto industry,” he said.
Michelle Krebs, executive analyst for Autotrader, said automakers will likely have to continue developing fuel-efficient cars for global markets where the trend is toward more stringent mileage standards – or moving away for internal combustion engines altogether in some cases.
“These are global automakers who see the rest of the world marching in a different direction,” she said. “To play in other markets, they must meet the standards of other countries, most notably China, the biggest car market in the world which is demanding cleaner vehicles like electrics.”
Krebs noted that fuel efficiency has not been a big motivating factor for U.S. car buyers, however.
“The disconnect in the U.S. is that consumers don’t favor clean, highly fuel-efficient vehicles like electrics and hybrids, particularly as gas prices remain low and consumers opt for sport-utility vehicles,” she said. “EV and hybrid sales account for a miniscule 3 percent or less of the entire new-car market annually.”