United States: Fuel Economy And Greenhouse Gas Emission Standards For Automobiles: EPA Announces That No Adjustments To The Standards For Model Years 2022-2025 Will Be Made

Last Updated: December 7 2016
Article by Kathryn B. Thomson and Christopher J. Carr

The United States Environmental Protection Agency (EPA or Agency) yesterday announced its proposed determination that greenhouse gas (GHG) emission standards for light-duty vehicles (LDVs) manufactured in model years (MYs) 2022-2025 would remain unchanged, following a midterm evaluation that commenced last summer.  EPA's action is notable for several reasons.  First, transportation sector emissions remain significant, accounting for approximately 26% of U.S. GHG emissions in 2015.  Second, and not surprisingly, the standards, which have been an integral component of the Obama Administration's Climate Action Plan, are an essential part of the United States' "national commitment" made pursuant to the Paris Agreement on climate change.  Third, EPA's action reflects the outgoing Administration's efforts to buttress its clean energy and climate change regulations and policies, so that if the new Administration wants to reverse or limit them, it will face a heavier lift, both procedurally and substantively if its actions are going to withstand judicial challenge.

Background

As one of President Obama's first official acts, he directed the United States Department of Transportation through the National Highway Traffic Safety Administration (NHTSA) and EPA to work together to establish the first joint corporate average fuel economy (CAFE) and GHG emission standards for LDVs.  NHTSA and EPA undertook a stakeholder process (including automobile manufacturers, labor unions, environmental groups, consumer advocates, the State of California, and members of Congress) to develop the first set of standards, which was announced in May 2009.  NHTSA and EPA replicated this collaborative approach several more times, culminating with the August 2016 joint announcement of Phase Two standards for medium- and heavy-duty vehicles built in MYs 2018-2027.

EPA and NHTSA estimated that the joint LDV standards would increase fuel economy to the equivalent of 54.5 miles per gallon by MY 2025, save consumers an estimated $1.7 trillion in fuel costs, and reduce domestic oil consumption by 12 billion barrels over the life of the program.  At the time they were announced, the joint standards garnered the broad support of consumers, automakers, labor, and environmental groups.  Since then, some stakeholders (including some automakers) have questioned the benefits of the standards relative to their costs in light of new information and have requested that the standards be adjusted in comments submitted in response to a draft technical assessment report (Draft TAR).

On November 30, EPA issued a "Proposed Determination on the Appropriateness of the Model Year 2022-2025 Light-Duty Vehicle Greenhouse Gas Emission Standards under the Midterm Evaluation," stating its intent to reaffirm the final GHG emission standards promulgated for MYs 2022-2025 in 2012.  This announcement comes more than 6 months ahead of NHTSA's and EPA's publicly stated plan to jointly release NHTSA's proposed CAFE standards and EPA's proposed determination in mid-2017.  EPA's action, while not entirely unexpected, may call into question the viability of a harmonized National Program beyond MY 2021 and NHTSA's role in setting standards for MY 2022 and beyond.

Comments on EPA's proposed determination are due by December 30, 2016.  EPA expects to finalize its determination before January 20, 2017.

What's Notable About EPA's Action?

President Obama directed NHTSA and EPA to act together because both agencies have independent statutory authority to set standards that govern CAFE requirements and GHG emissions limits for motor vehicles.  NHTSA's authority comes from the Energy Policy and Conservation Act (EPCA), as amended by the Energy Independence and Security Act (EISA).  EPA's authority is based on Section 202 of the Clean Air Act (CAA) and the Supreme Court's decision in Massachusetts v. EPA, 549 U.S. 497 (2007), holding that the CAA gives EPA the power to regulate tailpipe emissions of GHGs.  To avoid potential conflict between the two statutory programs, NHTSA and EPA developed a harmonized National Program.  The program allows manufacturers to build a single light-duty national fleet that would satisfy the requirements of both agencies.  The National Program also ended years of litigation involving fuel economy standards, ensured that consumers could still purchase the vehicles of their choice, substantially decreased oil consumption, and dramatically reduced GHG emissions.

So where's the rub?  By statute, NHTSA is authorized to finalize CAFE standards for no more than five years at a time (with a two year lead time).  This legal constraint was designed to ensure that the CAFE standards that are proposed and finalized reflect the "maximum feasible average fuel economy level that [NHTSA] decides that manufacturers can achieve" based on the most recent information available (49 U.S.C. § 32902(a)).  Under the CAA, EPA has no such time-limited restriction on its authority to set standards for the future.

To resolve this statutory conflict and provide automakers with some degree of certainty as to future requirements, in the rule published in October 2012, EPA finalized MYs 2022-2025 GHG standards for LDVs, and NHTSA proposed compatible "augural" standards for the same MYs.  But both NHTSA and EPA agreed to undertake a midterm evaluation – with public engagement – using a variety of factors to assess whether EPA's final standards and NHTSA's augural standards for MYs 2022-2025 should be adjusted.  The agencies remained committed to a harmonized National Program.

The midterm evaluation process formally started on July 18, 2016, with NHTSA's and EPA's issuance of the Draft TAR.  Announcing the release of the Draft TAR, the agencies stated:  "Using comments to the Draft TAR and the best available data and information, NHTSA will begin to develop its rulemaking to establish CAFE standards for MYs 2022 and beyond, while EPA will consider whether its existing GHG standards for those MYs continue to be appropriate or should be revised."  The comment period closed on September 26, 2016, and a number of commenters raised concerns – based on new data (including lower than anticipated oil prices), updated assumptions and analysis – about whether adjustments to the National Program should be made.

EPA stated its intent to issue a proposed determination on whether to adjust the standards in mid-2017 at the same time that NHTSA expected to issue a proposed rule setting standards for the same MYs.  Both agencies publicly reiterated their intent to take final action (EPA with a final determination and NHSTA with a final rule) in April 2018.

EPA's November 30, 2016 proposed determination concludes that the final GHG standards for LDVs manufactured in MYs 2022-2025 remain appropriate and no adjustments are necessary.  NHSTA made no comparable announcement, and EPA's proposed determination does not explain whether, and if so to what extent, EPA will continue efforts to harmonize its standards with NHTSA's CAFE standards.

What's Next?

EPA's action is likely motivated by concerns that the incoming Administration may attempt to roll back regulations that have driven some of the significant progress that has been made on reducing GHG emissions from the transportation sector.  EPA will likely assert that the GHG standards for MYs 2022-2025 are immune from judicial challenge under the Administrative Procedure Act and Congressional review under the Congressional Review Act because the Agency finalized the rules in 2012.  Regardless, it is reasonable to anticipate judicial, administrative, and political challenges that raise concerns about potentially incompatible regulatory programs and renew debates on whether EPA or NHTSA should have sole authority to set tailpipe standards or continue to share that responsibility.  Additionally, EPA's action may prompt efforts to reopen the discussion of whether California should continue to have unique authority under the CAA to set its own standards.

Interested parties have 30 days to comment on EPA's proposed determination.

Learn more about the EPA regulations.

Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morrison & Foerster LLP. All rights reserved

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Kathryn B. Thomson
Christopher J. Carr
Similar Articles
Relevancy Powered by MondaqAI
Lewis Roca Rothgerber Christie LLP
Lewis Roca Rothgerber Christie LLP
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Lewis Roca Rothgerber Christie LLP
Lewis Roca Rothgerber Christie LLP
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions