AUTOS INDUSTRY
EPA Official Signals Willingness to Negotiate on Car-Emission Rules
The Wall Street Journal.
Aug 1, 2017
TRAVERSE CITY, Mich.—Auto makers selling electric cars and putting vehicles in ride-sharing fleets could receive significant credits toward meeting stringent U.S. emissions standards, proposals that would revise current regulations that were locked in under the Obama administration, an Environmental Protection Agency official said.
“We need to think differently,” said Christopher Grundler, head of the EPA’s transportation and air-quality office, at an automotive conference Tuesday. He said regulators and car companies faced “a golden opportunity” to discuss measures that could help the industry meet rising standards while still reducing emissions and increasing fuel economy. He focused on new-vehicle technologies and Americans traveling in ride-sharing vehicles.
Mr. Grundler’s remarks signaled a willingness to negotiate with auto makers on tweaks to regulations mandating they sell vehicles averaging 54.5 miles a gallon, or 40 mpg in real-world driving, by 2025. The regulatory emissions targets are often expressed in terms of mileage and start rising sharply in 2022.
Mr. Grundler said he hadn’t run his ideas by the EPA’s political leadership, and that they remained initial proposals. But they reflected a new political reality under the Trump administration, which has embarked on dismantling Obama-era climate-change regulations.
The Trump administration, following weeks of industry lobbying, reopened a review of vehicle emissions standards in March, reversing an earlier Obama administration decision that locked in future targets. The EPA had closed the review in January, about a week before Mr. Trump’s inauguration. An April 2018 deadline looms for a new final determination from regulators on whether the standards should be relaxed, strengthened or left unchanged.
The value of credits toward meeting the standards could increase based on the placement of vehicles in ride-sharing services that use renewable energy, Mr. Grundler said. Mr. Grundler also suggested credits could be earned for demonstrating vehicles are increasingly operating in “eco” modes. Credits help auto makers comply with regulatory targets when they otherwise would fall short.
Mr. Grundler’s proposals are “very thoughtful ideas along the lines of what we need to be talking about,” said John Bozzella, head of a Washington lobbying group representing foreign auto makers with U.S. operations.
Auto makers contend the current standards are too challenging to meet during an era of cheap gasoline that is sending consumers flocking to fuel-thirsty and higher-emitting pickup trucks and sport-utility vehicles that now account for more than 60% of U.S. sales.
Electric cars and hybrids, by comparison, garner a sliver of the U.S. market. Car companies have also argued that complying with current rules would prove expensive and potentially lead to job losses.
Auto makers aren’t only contending with U.S. officials. They are potentially headed for a clash with California, which has a waiver from the EPA to set its own tailpipe-emissions standards that a dozen other states follow.
California officials have criticized the Trump administration’s decision to reopen the emissions review. A New York-led coalition of state attorneys general earlier this year wrote to EPA Administrator Scott Pruitt threatening to take the agency to court if the standards are weakened.
California and states following its lead represent roughly 40% of the U.S. auto market, and their future standards are currently aligned with the federal regulations the Obama administration locked in before the review was reopened. Auto makers want U.S. standards relaxed but also want to avoid a patchwork of rules across state lines.
“This is the crash-avoidance discussion,” said Mr. Bozzella, borrowing a label for safety technology auto makers install on vehicles. “The crash I’m referring to is the conflict between competing regulations and policy goals that we absolutely, positively have to avoid.”
California hasn’t yet been invited to participate in the talks around the U.S. emissions review, said an official with the state’s Air Resources Board, the agency that regulates tailpipe emissions, during a panel discussion.
Mr. Bozzella said auto makers didn’t ask for regulations to be rolled back, but instead sought a “robust analysis of the data” when regulators review emissions standards. Car companies also want the rules better aligned with the National Highway Traffic Safety Administration, which sets fuel-economy targets and recently said it would review 2022-25 standards.
“A year from now, we’ll know if we avoided the crash or are in the midst of one,” Mr. Bozzella said.
