United States: EPA Issues Final Determination That No Adjustments To GHG Standards For Model Years 2022-2025 Will Be Made, But Questions Remain

On January 12, the U.S. Environmental Protection Agency (EPA) finalized its determination not to change greenhouse gas (GHG) emission standards for cars and light trucks manufactured in model years (MYs) 2022-2025.  This means that regulations requiring automakers to limit carbon dioxide emissions by increasing fuel efficiency and other means will continue to become more demanding over the next eight years.

While EPA's "Midterm Evaluation" of its GHG emission standards is now complete, the standards face an uncertain future given the potential for opposition from a Republican-controlled Congress, legal challenges, and the agenda of the incoming Administration.  Additionally, interested parties should stay tuned to ongoing regulatory review by the National Highway Traffic Safety Administration (NHTSA) of its Corporate Average Fuel Economy (CAFE) standards, the California Air Resources Board's (CARB) review of California's Advanced Clean Cars Program, and other agency evaluations of petitions to amend federal standards.

The Final Determination

EPA and NHTSA established existing federal GHG emissions and corporate average fuel economy (CAFE) for light-duty vehicles, including cars and trucks, in 2012.  At that time, EPA committed to conduct a Midterm Evaluation of the GHG standards to determine if adjustments should be made to those set for MY 2022-2025 light-duty vehicles.

EPA completed its Midterm Evaluation last Friday, following the November 2016 release of EPA's Proposed Determination and the July 2016 release of a Draft Technical Assessment Report issued jointly by EPA, NHTSA, and the California Air Resources Board.

EPA's Final Determination keeps in place GHG reduction targets for MYs 2022-2025.  If all reductions were achieved exclusively through fuel economy improvements, these standards would demand new cars to average 51.4 mpg by 2025.  However, because automobile manufacturers may meet GHG reduction targets through other means that do not improve fuel economy, such as by improving the efficiency of air conditioning systems, the actual fuel economy required of MY 2025 vehicles is projected to be lower.  Specifically, EPA projects that the GHG standards could be met if automobile manufacturers achieve a "real world" average fuel economy of 36 mpg by 2025.  This represents an improvement of 10 mpg over the next 10 years, or about one mpg per year.

EPA's Justifications for Not Changing GHG Standards

EPA offered many justifications for its rule, which align with the statutory criteria relevant to setting GHG emissions standards under section 202(a) of the Clean Air Act.  Four rationales figured most prominently in EPA's Determination.

First, EPA found keeping GHG standards in place appropriate because they will achieve significant reductions in carbon dioxide emissions and oil consumption.  EPA estimated that the MY2022-2025 standards will reduce GHG emissions by 540 million metric tons and reduce oil consumption by 1.2 billion barrels over the lifetime of the regulated vehicles.

Second, EPA found that compliance with the GHG standards is "feasible at reasonable cost, without need for extensive electrification" of the vehicle fleet.  EPA estimated that the per-vehicle cost of the standards likely will be lower than projected in 2012, or at least comparable.

Third, EPA concluded that the standards will provide significant benefits to consumers and to the public.  The Determination projects that the net benefits of the MY2022-2025 standards are nearly $100 billion, which EPA says "far exceed the costs of the program."  According to EPA, consumers would realize net savings of $1,650 over the lifetime of a new vehicle, mostly through fuel savings.

Fourth, EPA concluded that "the auto industry is thriving and meeting the standards more quickly than required."  EPA observed that manufacturers are over-complying with standards applicable to MY2015, even though fuel prices are low, which might be expected to decrease consumer demand for fuel-efficient vehicles.

While it found that lowering standards was not merited, EPA left open the door to raising them, noting that "the current record . . . could support a proposal, and potentially an ultimate decision, to adopt more stringent standards for MY2022-2025."  However, the EPA declined to raise standards at this time, citing the need to provide certainty to the auto industry and allow for advanced planning.

Remaining Review

While EPA's Midterm Evaluation is now complete, additional review relevant to the GHG emission standards remains pending before NHTSA, the California Air Resources Board, and EPA. 

Unlike EPA's authority to regulate emissions from vehicles under the Clean Air Act, which has no time restrictions, NHTSA lacks statutory authority to finalize CAFE standards for more than five years at a time.  For that reason, while EPA finalized GHG emissions standards through MY 2025 back in 2012, NHTSA only provided "augural" or expected standards for MYs 2022-2025.  As EPA acknowledged in its Final Determination, NHTSA still must establish CAFE standards for MYs 2022-2025 at least 18 months before the beginning of each model year.  This will require NHTSA to complete a full notice and comment rulemaking process.  In 2012, EPA expressed intent to issue a final determination regarding its Midterm Evaluation concurrently with NHTSA's final rule adopting fuel economy standards for MY2022-2025.  EPA explained in its Final Determination that it ultimately did not do so in order to allow "NHTSA to fully account for the GHG standards" and ensure that the auto industry has sufficient lead time to plan for and achieve compliance.

The California Air Resources Board (CARB) also continues to review California's Advanced Clean Cars Program, including the Low and Zero Emission Vehicle regulations, Particulate Matter (PM) Standards, and GHG regulations.  A report on the "Midterm Review" is expected to be released by CARB staff and made available for public comment before consideration by the Board.

In addition to these reviews, EPA's Final Determination recognizes that a petition submitted by auto industry trade associations on June 20, 2016, remains pending before the EPA.  The petition asks EPA and NHTSA to harmonize GHG standards and CAFE standards, focusing primarily on CAFE standards for MYs 2010-2021, which the trade associations state "could force manufacturers to pay CAFE fines despite being able to meet the GHG standards."  NHTSA partially granted the petition on December 21, 2016, while recognizing that NHTSA was not speaking for EPA.

Interested parties will want to participate in NHTSA's rulemaking process for CAFE standards, CARB's review of California's Advanced Clean Cars Program, and EPA's evaluation of the pending petition for rulemaking.

Uncertainties Ahead

Several questions remain about the GHG standards' future.

First, a Republican-controlled Congress could move to reverse the Final Determination under the Congressional Review Act, which enables Congress, through a filibuster-proof process, to disapprove of regulations adopted within the previous 60 legislative days.  The ability of Congress to use the Congressional Review Act is uncertain given that the Final Determination is not itself a regulation but instead a decision not to adjust an existing regulation.  Additionally, it is possible that President-elect Trump and/or a majority of Congress will not want to resort to use of the Congressional Review Act.  This is because a resolution of disapproval under the Act has the effect of prohibiting agencies from issuing a rule in "substantially the same form" again without the approval of Congress.

Second, existing GHG standards could be reviewed and amended once President-elect Trump takes office. To change the current GHG rules, EPA would need to initiate and complete a new rulemaking, which would take time.  Even then, the EPA would need to provide a reasoned explanation for changing its mind in order to survive judicial scrutiny, which may be difficult given the technical analysis and review the agency has completed to date.  Similarly, while NHTSA has not completed its rulemaking process for MY 2022-2025 CAFE standards, the agency would need to explain any departures from EPA's conclusions in the Final Determination and the underlying findings of the July 2016 technical assessment report that NHTSA issued jointly with EPA.

Finally, some vehicle manufacturers have expressed discontent with EPA's Final Determination, including the expedited review process through which it was issued and certain estimates, such as consumer demand for low-emission vehicles, upon which it was based.  Such auto-industry interests could file suit to set aside EPA's Determination, and would need to do so within 60 days after the date the Determination first appears in the Federal Register.  While the Trump Administration might decide not to defend the EPA's determination, other stakeholders could intervene and seek to uphold EPA's decision against the challenge.  If such a lawsuit were successful, it would send the agency back to the drawing board and thus provide the Trump Administration with a cleaner slate on which to decide next steps.

Learn more about EPA's Final Determination.

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.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please 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.


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.


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