Bloomberg Environment: ELPC’s Ann Mesnikoff Concerned Carmakers’ ‘Harmonization’ Push Could Soften Fuel Efficiency Gains

Bloomberg Environment

February 21, 2018

By Abby Smith

Automakers may already get what they want this spring as the Trump administration eyes lower fuel economy targets—but the industry is also seeking smaller, technical changes to the program that could lead to fewer fuel efficiency improvements down the road.

Automakers seek “harmonization” to secure the “one national program” sketched out in an agreement they made with the Obama administration to reduce greenhouse gas emissions and improve fuel efficiency under the umbrella of consistent programs at the Environmental Protection Agency, the National Highway Traffic Safety Administration, and the California Air Resources Board.

The automakers’ request, which could make it easier for them to meet the standards, comes as the Trump administration weighs the future of fuel efficiency and greenhouse gas standards for passenger cars—and considers options that would soften limits. Environmentalists say even subtle changes to “harmonize” EPA standards and the NHTSA’s fuel economy program could risk putting millions of more tons of greenhouse gases into the atmosphere. Currently, car makers need to comply with both standards.

Generally, automakers use the term “harmonization” to refer to changes that would sync the way agencies offer flexibility in how industry meets standards.

“Harmonization relief is long overdue,” Wade Newton, a spokesman with the Alliance of Automobile Manufacturers, told Bloomberg Environment. The alliance represents a dozen major automakers, including the Ford Motor Co., General Motors, Fiat Chrysler Automobiles, BMW Group, Toyota Motor Corp., Volkswagen AG, and Volvo Car Corp.

Tensions over the issue mirror broader divisions over the vehicles program’s future—and they’re likely to come to a head in the coming months.

Automakers’ “goal is not harmonization,” Dave Cooke, senior vehicles analyst in the Clean Vehicles Program of the Union of Concerned Scientists, told Bloomberg Environment. “Their goal is providing flexibilities and effectively weakening the stringency of the rules.”

Last year, the EPA, at the request of automakers, re-opened a mid-term review of standards for model year 2022-2025 vehicles, reversing an Obama-era decision to maintain the program’s stringency for those years.

The EPA must decide whether it will alter its standards by April 1. NHTSA intends to release its proposed fuel economy standards March 30, the agency’s deputy administrator Heidi King has said.

EPA Administrator Scott Pruitt during a Senate environment committee hearing last month pointed to the importance of “harmonization” with NHTSA’s program.

“As you know, there are joint equities there between [NHTSA, which is part of the Department of Transportation] and EPA. And we’re working diligently with them to harmonize these efforts, again, to provide clarity on these issues,” Pruitt said.

But he didn’t say specifically whether the EPA would address automakers’ concerns.

California’s role adds another complicating factor to the debate over the standards—separate from “harmonization” between the EPA and NHTSA regulations.

The Golden State has the ability under the Clean Air Act to set limits stricter than federal levels, and a dozen states have adopted California’s standards. California has pledged to move forward with those stronger standards, even if the Trump administration weakens the federal program.

Two auto industry trade groups—the Alliance of Automobile Manufacturers and the Association of Global Automakers—jointly petitioned the EPA and NHTSA in 2016, detailing a number of technical requests they said would match up the programs.

While NHTSA in late 2016 partially granted the petition and pledged to address automakers’ concerns when it sets fuel efficiency standards for model year 2022-2025 vehicles, the EPA still hasn’t responded to automakers’ requests.

The EPA had indicated it would publish a direct final rule that “would correct minor technical errors” consistent with the automakers’ petition in November 2017. The agency is working on that rulemaking but doesn’t have further information to share at this time, an EPA spokesperson told Bloomberg Environment.

Automakers argue that without harmonization changes, a manufacturer can find its fleet in compliance with EPA controls but falling short of NHTSA fuel efficiency levels.

“Compliance with one doesn’t guarantee” compliance with another, Newton said.

But it’s unclear how often auto manufacturers find themselves such in a situation, Steve Silverman, who was a staff attorney at the EPA for 37 years, told Bloomberg Environment. He noted the 2016 petition from auto industry trade groups doesn’t point to specific examples of it.

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