California, 4 automakers reach framework agreement on GHG standards; slight FE weakening, no upstream emissions calculations
As the Trump administration prepares to freeze emission standards for light-duty cars and trucks, a consortium of four automakers—Ford, Honda, BMW of North America and Volkswagen Group of America—and California have agreed on a voluntary framework to reduce emissions that could serve as an alternative path forward for clean vehicle standards nationwide.
The agreement slightly weakens the current standards by decreasing the original fuel economy increases year-over-year and moves the current 2025 requirement to 2026, resulting in slightly less aggressive year-over-year reductions. (That is, changing the original year-over-year 4.7% GHG reduction over four years to 3.7% over five years.)
Of the 3.7% annual stringency, 1% can be achieved using advanced technology multiplier credits. This would continue current advanced technology multipliers that now expire after MY 2021, extending them through MY 2024 at the current 2.0x for Battery Electric and Fuel Cell Electric Vehicles (BEV/FCEV), and 1.6x for Plug-in Hybrid Electric Vehicles (PHEV), tapering off at the current MY 2020 and MY 2021 levels in MY 2025 and MY 2026, respectively.
Other elements of the agreement are:
Raise the current cap on off-cycle menu credits, which account for actions taken outside the formal test cycle framework, from 10 grams per mile to 15 grams per mile starting in MY 2020.
Simplify compliance by removing the requirement to consider upstream GHG emissions associated with the production of the electricity used by electric vehicles when calculating the GHG emissions for a carmaker’s fleet.
Participating companies are choosing to pursue a voluntary agreement in which California accepts these terms as compliance with its program, given its authority, rather than challenge California’s GHG and ZEV programs.
This agreement represents a feasible and acceptable path to accomplishing the goals of California and the automobile industry. If the White House does not agree, we will move forward with our current standards but work with individual carmakers to implement these principles. At the same time, if the current federal vehicle standards proposal is finalized, we will continue to enforce our regulations and pursue legal challenges to the federal rule.—California Air Resources Board Chair Mary D. Nichols