As expected, on January 12, 2017, the U.S. Environmental Protection Agency (EPA) issued its Final Determination affirming the greenhouse gas (GHG) emission standards for model year 2022-2025 light-duty vehicles. While EPA had until April 1, 2018 to issue this Final Determination, it did so quickly, less than two weeks following the close of the public comment period on the agency’s Proposed Determination, detailed in our prior blog here. This Final Determination makes it much more difficult for the new administration to change course.
EPA’s Final Determination was originally anticipated to be released later in 2017, along with joint midterm evaluations from the National Highway Traffic Safety Administration (NHTSA) and the California Air Resources Board (CARB). NHTSA is required to issue corporate average fuel economy (CAFE) standards as part of its midterm evaluation. It’s possible that under the Trump administration CAFE standards could be delayed or proposed in conflict with EPA’s GHG emission standards. While NHTSA jointly-authored with EPA and CARB the draft Technical Assessment Report (TAR)—upon which it’s CAFE standards are to be based—conflicting rules are at least possible in theory. Such a conflict will not come from CARB, however. Even though CARB is not expected to complete its review until March, the agency has already released a statement supporting EPA’s Final Determination.
The most likely means for EPA to change course under the new administration would be for EPA to issue a new notice and comment rulemaking. This would require new technical data in support of less-stringent standards. While industry already has much data to support this purpose, EPA faces a high hurdle in using such data to demonstrate that the TAR is wrong—that the technical record does not support the current standards. While a new rulemaking is plausible, the length of time it requires poses challenges in and of itself, as the auto industry develops model years well in advance and needs regulatory certainty to do so. Further, without a change in California, automakers will either have to comply with the stringent standards or develop two strategies – one federal, and one for California.
For more information about the GHG emission standards, compliance challenges that companies might face and how to best mitigate risk and avoid fines, please contact Bruce Pasfield, Elise Paeffgen, Maureen Gorsen, Meaghan Boyd or any of the other members of our Environment, Land Use & Natural Resources practice team.