The US Environmental Protection Agency Monday formally scrapped the Obama administration's fuel economy standards for 2022-25 model year cars and light trucks, a move that was widely expected and sets up a confrontation with California over its stricter standards.
The agency stopped short of revoking California's waiver to set higher standards, saying the issue was "still being reexamined" by Administrator Scott Pruitt.
"Cooperative federalism doesn't mean that one state can dictate standards for the rest of the country," Pruitt said in a statement. "EPA will set a national standard for greenhouse gas emissions that allows auto manufacturers to make cars that people both want and can afford -- while still expanding environmental and safety benefits of newer cars.
"It is in America's best interest to have a national standard, and we look forward to partnering with all states, including California, as we work to finalize that standard," Pruitt said.
EPA said the current standards "are not appropriate and should be revised."
The determination likely starts another long regulatory process that could end up in court, if the agency decides to revoke California's waiver.
The Auto Alliance trade group, which has campaigned for one national fuel economy standard, applauded EPA's decision and said it allows the Trump administration to pursue a "data-driven effort and a single national program as it works to finalize future standards."
"Maintaining a single national program is critical to ensuring that cars remain affordable," said Auto Alliance spokeswoman Gloria Bergquist.
Securing America's Future Energy, a Washington group that aims to reduce US dependence on oil, encouraged the federal government, California and automakers to find a solution that creates a single standard that is strong and incorporates advanced vehicle technologies.
"If the parties can seize the opportunity to optimize this process and avoid diverging standards between California and the federal government, the outcome will be a win-win for consumers, the auto industry and our national security," said Robbie Diamond, SAFE's president.
President Donald Trump announced in March 2017 that he was reopening a midterm review of US light duty vehicle fuel economy standards to improve economics for automakers and that he was considering erasing targets put in place by the Obama administration.
California holds a waiver from EPA allowing it to set stricter standards than the federal limit through model year 2025, and a dozen states follow California's lead.
In January 2017, EPA determined ahead of schedule and in the final days of the Obama administration that US automakers are meeting the targets quicker and at lower costs than expected, leaving the industry more than able to meet the 2025 goal of 54.5 mpg for the nationwide fleet average. The original deadline was April 2018.
The rules for corporate average fuel economy and greenhouse gas emissions impact automakers' decisions about vehicle body weights, engine specifications, and promotion of hybrid and electric vehicles.
But a major aluminum components manufacturer told S&P Global Platts last year that US automakers have invested too much in so-called "lightweighting" of the vehicle fleet to abandon the trend, no matter what the Trump administration does with the CAFE standards.
