Background. In 2009, EPA issued an Endangerment Finding that vehicle greenhouse gas emissions contribute to climate change, and thus threaten public health and welfare. In 2012, EPA and NHTSA set joint greenhouse gas and fuel economy standards over a decade in advance for MY 2022-2025.

As part of the 2012 joint rulemaking by EPA and NHTSA establishing the model year (MY) 2017-2025 light-duty vehicle GHG (EPA) and fuel economy (NHTSA) standards, the agencies made a regulatory commitment to conduct a Midterm Evaluation (MTE) of the standards for MY 2022-2025.

The MTE was agreed to because at the time, no agency had set emissions standards so far in the future; this, in turn, entailed some obvious uncertainties. The agencies agreed at the time that the review would be collaborative, and developed in tandem. Both indicated that they would note complete a proposed rulemaking until mid-2017 at the earliest.

However, in November 2016, EPA issued a proposed determination maintaining the current standards without modification—without coordination with NHTSA. The final standards as maintained were projected to result in an average industry fleet-wide level of 163 grams/mile of CO₂ in model year 2025—equivalent to 54.5 mpg (4.31 l/100 km), if achieved exclusively through fuel economy improvements. Thence, EPA issued its Final Determination 14 days after the comment period (which was only 24 days and spanning the holiday period) closed.

In December, Global Automakers, the trade association representing the US divisions of 12 international automakers, had called on the EPA either to withdraw the proposed determination or to extend the comment period (earlier post):

The Environmental Protection Agency’s (EPA) decision to rush forward with its Midterm Evaluation and issue a Proposed Determination on MY 2022-2025 greenhouse gas (GHG) emission standards undermines the important process the regulators and automakers agreed to in 2012 for establishing one harmonized national program for regulating GHG and fuel economy. Global Automakers and its members remain committed to the goals of one national program and therefore are asking the EPA to withdraw its Proposed Determination, or at the very least grant an extension of the current 30-day comment period.

Emissions standards going forward were to be based on a data-driven and objective review in which the EPA, the National Highway Traffic Administration (NHTSA) and the California Air Resources Board (CARB) are aligned every step of the way. The hasty decision to accelerate the EPA process, taken in the waning days of an Administration, raises serious concerns about the objectivity and factual foundation of their action.

We look forward to working with EPA, NHTSA and CARB on harmonized standards that are achievable, cost-effective, and most importantly account for the needs of customers.

—John Bozzella, President and CEO, Global Automakers

In February, The Auto Alliance sent a letter to EPA Administrator Scott Pruitt requesting that the US Environmental Protection Agency withdraw the Final Determination on the Appropriateness of the Model Year 2022-2025 Light-Duty Vehicle Greenhouse Gas Emissions Standards under the Midterm Evaluation—citing similar objections to those of Global Automakers. (Earlier post.)

EPA’s failure to act in coordination with NHTSA also casts serious doubt on the legitimacy of EPA’s data and conclusions, given the substantial discrepancies between EPA’s and NHTSA’s analysis of the technologies and the costs associated with the MY 2022-2025 standards.

…The Alliance is not asking EPA to make a different Final Determination at this time. All we are asking is that EPA withdraw the Final Determination and resume the Midterm Evaluation, in conjunction with NHTSA, consistent with the timetable embodied in EPA’s own regulations.

—Alliance letter to Administrator Pruitt

Reconsidering the Final Determination. In the Notice of Intention to Reconsider, the EPA and NHTSA noted that:

Given that CO₂ makes up the vast majority of the GHGs that EPA regulates under section 202(a), and given that the technologies available for regulating CO₂ emissions do so by improving fuel economy (which NHTSA regulates under EPCA/EISA), NHTSA’s views with regard to what CAFE standards would be maximum feasible for those model years is an appropriate consideration in EPA’s determining what GHG standards would be appropriate under the CAA. … However, NHTSA has not yet considered what CAFE standards would be the maximum feasible standards for MYs 2022-2025. Accordingly, EPA has concluded that it is appropriate to reconsider its Final Determination in order to allow additional consultation and coordination with NHTSA in support of a national harmonized program.

For its part, NHTSA will continue to engage with stakeholders as it works to develop a Notice of Proposed Rulemaking to set CAFE standards for MYs 2022-2025. As explained in the 2012 final rule, this proposal will be part of “a de novo rulemaking conducted … with fresh inputs and a fresh consideration and balancing of all relevant factors, based on the best and most current information before the agency at that time.”

—Notice of Intention to Reconsider

As a part of this process, EPA will examine a wide range of factors, such as developments in powertrain technology, vehicle electrification, light-weighting and vehicle safety impacts, the penetration of fuel efficient technologies in the marketplace, consumer acceptance of fuel efficient technologies, trends in fuel prices and the vehicle fleet, employment impacts, and many others.

Resources

• Notice of Intention to Reconsider the Final Determination