The Environmental Protection Agency (EPA) is finalizing the federal greenhouse gas (GHG) emissions standards for passenger cars and light trucks for Model Years (MY) 2023 through 2026.
The standards through 2026 also set the light-duty vehicle greenhouse gas (GHG) program on track to provide a strong launch point for the Agency’s next phase of standards for MY 2027 and beyond. EPA is planning to initiate a separate rulemaking to establish multi-pollutant emission standards under the Clean Air Act for MY 2027 and later.
CO2, Compared to the Proposal and 2012 and 2020 Rules, grams/mile, 2021-2026. Source: EPA
The final program represents will reach a projected industry-wide target of 161 grams CO2 /mile, or 40 miles per gallon value on fuel economy window stickers in 2026.
The final emission standards targets for 2023-2026 increase in stringency by between 5-10% in each model year.
The standards they replace increased in stringency by only 1.5% year over year.
By MY2026 the final emissions targets are 47 grams of CO2 /mile lower than the standards they replace.
EPA’s analysis shows manufacturers can comply with the final standards with modest increases in the numbers of electric vehicles entering the fleet. By MY 2026, EPA projects that the final standards can be met with sales of about 17% electric vehicles (EVs), and wider uptake of advanced gasoline engine and vehicle technologies available today.
As the GHG standards get stronger over four years, sales of EVs and plug-in hybrid vehicles will grow from about 7% market share in MY 2023 to about 17% in MY 2026, the agency projects.
EPA has in the past offered automakers compliance options to help them meet standards in the ways that are most appropriate and cost-effective for individual companies. With these new rules, however, EPS is finalizing flexibility provisions that are narrower than proposed. The final rule focuses the available flexibilities in MYs 2023-2024 to help manufacturers manage the transition to more stringent standards in the longer term by providing some additional flexibility in the near-term. The flexibilities that EPA is adopting are:
A limited extension of credits generated by overcompliance with the MYs 2017 and 2018 standards that can be carried forward for compliance with the MY 2023-2024 standards, respectively.
Advanced technology vehicle multiplier credits for MYs 2023-2024 with a cumulative credit cap of 10 grams CO2 per mile. This incentive encourages manufacturers to accelerate introduction of zero and near-zero emissions vehicles.
Full-size pickup truck incentives for strong hybrids or similar performance-based credit for MYs 2023-2024. Similar incentives were included in the 2012 rule but removed by the 2020 SAFE rule for MYs 2022-2025.
“Off-cycle” credits of up to 15 g/mile. Off-cycle credits recognize and incentivize technologies that provide real-world emissions reductions but which are not captured on EPA’s tailpipe emissions compliance tests. These include technologies such as high-efficiency headlamps or solar reflective paint that keeps the vehicle cabin cooler to reduce air conditioning needs.
According to the agency’s analysis, the standards are feasible at reasonable costs and achieve significant GHG emissions reductions and public health and welfare benefits. By fhe EPA’s calculations, the rule’s benefits exceed the costs by $120 to $190 billion through 2050. Between $8 and $19 billion of the total benefits through 2050 result from improved public health as a result of reduced emissions of non-GHG pollutants, including NOx and other pollutants that contribute to fine particulates (PM2.5).