California ready to pursue clean car standards as Trump brakes

[March 16, 2017]  By Peter Henderson

SAN FRANCISCO (Reuters) - Automakers hailed President Donald Trump’s call on Wednesday for the U.S. Environmental Protection Agency to review and possibly dial back car fuel efficiency standards. But California sees things differently.

California plans to move ahead with tougher car pollution rules for 2022-2025, which the administration of former Democratic President Barack Obama hastily approved before Trump took office. California regulators are expected to finalize the rules at a March 23-24 meeting.

Environmental Protection Agency Administrator (EPA) Scott Pruitt, a climate change skeptic, said his agency will review the federal rules and is widely expected to loosen them.

Meanwhile industry group Auto Alliance has sued the EPA to overturn its rules, which automakers says are expensive and could cost Americans jobs. California's attorney general has asked the court to let the state defend the Obama regulations.

Currently, the nation has a single set of standards automakers must meet when manufacturing vehicles. The clash between California and the Trump administration could lead to one set of standards in California and at least a dozen other states and another standard in the rest of the country, increasing costs for car makers and headaches for consumers.

"We are not backing down," said Hector De La Torre, a member of the California Air Resources Board, which sets policy that more than a dozen other states follow in full or part. Reuters spoke to a majority of board members, who all voiced support for the original plan worked out by the federal government, carmakers and California during Obama's presidency.

That plan includes stricter tailpipe emissions targets and a California mandate for zero-emissions cars.

Pollution controls carry important financial and health consequences for the United States.

U.S. and California regulators last year projected in a draft review that stricter pollution controls will add about $1,000 to the cost of each car sold in 2025. They say that cost will be more than offset by the benefit of lower fuel costs and cleaner air. Automakers say they did not get enough time to review the study.

'VEHEMENT' DEFENSE

Governor Jerry Brown has promised to lead the fight to stop Trump from weakening environmental rules, a stance echoed by Air Resources Board Chair Mary Nichols.

“We intend to stick by the commitments that we made. If for some reason the federal government and the industry decide to abandon those agreements that we all reached, we will have to re-examine our options," she said in an interview. "If the issue is are they going to relax the standards, then we would vehemently oppose that.”

Federal law prohibits states from setting their own vehicle emissions rules, except for California, which can seek waivers to federal policy under the Clean Air Act.

California has a waiver for the plan through 2025, although its targets are the same as federal ones and it does not require separate compliance from automakers.

If the EPA relaxes its own rules, that could change. California may hold automakers to the original targets by beginning to enforce its rules independently. It is not clear whether that technical decision would require an additional waiver from the Trump administration.

Natural Resources Defense Council vehicle analyst Simon Mui argued it would not. "California doesn't need a permission slip to stick with the standards it has on the books," he said.

Automakers desperately want to continue with a national policy to avoid making different cars for different states. Oil refineries already face challenges in California because they say the state has the strictest environmental rules in the United States, requiring special blends of gasoline to reduce pollution.

In a battle with California, the federal government could try to change the Clean Air Act to end regulation of carbon dioxide as a pollutant, or it could try to revoke California's permission to enforce the current car pollution program.

Both approaches could be difficult, and a Trump administration official speaking on condition of anonymity, said the president was not seeking to revoke California's authority at this time, but would not rule out such a move in the future.

(Additional reporting by Rory Carroll in San Francisco and Valerie Volcovici in Washington; Editing by Sue Horton and Lisa Shumaker)

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