White House to propose weaker auto emissions rules, overriding California

[August 02, 2018]  By Joseph White

(Reuters) - The Trump administration on Thursday will move to revoke California's authority to set its own strict tailpipe emissions rules and mandate the sale of electric vehicles, as it proposes weakening Obama-era federal fuel efficiency standards.

The proposal to roll back anti-pollution efforts, to be released early on Thursday according to one administration official, is in line with President Donald Trump's decision last year to abandon the 2015 Paris deal aimed at slowing climate change.

It will escalate the administration's legal battle with California and about a dozen other states that have adopted California's emission rules, and account for about a third of the U.S. auto market.

Seventeen states, including California, and the District of Columbia filed a lawsuit in May challenging the U.S. Environmental Protection Agency's decision a month earlier to declare U.S. vehicle emission rules in place through 2025 "not appropriate." In March, California Attorney General Xavier Becerra said he would use "every legal tool" to protect the current standards.

Trump promised Midwestern auto workers last year that he would tear up vehicle rules touted by the administration of former President Barack Obama as among its biggest climate actions.

Democrats hope to make any rollback a key part of the 2018 congressional elections. Republicans in states with links to the auto industry may contend the administration is working to ensure automakers can make more profitable larger vehicles, including fuel-thirsty pickups and SUVs, without excess regulation and state interference.

Some middle ground on the issue might be possible, with acting EPA chief Andrew Wheeler saying Wednesday he would welcome a deal between the industry and states like California on vehicle fuel economy, once they consider the Trump administration's proposal.

The rollback in emissions standards is problematic for automakers. The administration has said it will deliver regulatory relief potentially worth billions, by reducing the need for costly technologies required to achieve greater fuel efficiency. But it does so in a way that could create more uncertainty for an industry already struggling with rising tariff risks and a murky sales outlook.

Automakers have long pressed for one set of rules for emissions and greenhouse gases, saying a national regulatory framework to improve fuel economy reduces complexity and costs for the industry.

The "preferred option" in the administration's proposal, to be issued by the EPA and the U.S. Department of Transportation, would freeze the Obama fuel efficiency targets at 2020 levels, requiring no further improvement. That means the fleets of cars and light trucks sold by automakers in the United States could average about 37 miles (59.5 km) per gallon, instead of the 46.8 mpg projected for 2026 under the Obama rules.

Cars drive past a California emissions testing site in Oceanside, California, U.S. on September 29, 2015. REUTERS/Mike Blake/File Photo

U.S. fuel consumption would increase by about 500,000 barrels daily as a result, a person briefed on the matter said, adding that such an increase would have only a "negligible impact" on the global climate.

The administration has characterized its proposal to freeze fuel efficiency and emissions targets as a step that would save up to 1,000 lives per year, by reducing the cost of new vehicles and encouraging people to buy safer new cars sooner.

Environmental groups have criticized that analysis and said the proposal would drive up gasoline prices and reverse one of the most significant steps Washington has taken to curb climate changing greenhouse gas emissions. It would also put more lives at risk due to asthma-inducing emissions, environmental advocates say.

Trump's decision to challenge California's authority to regulate vehicle emissions upends decades of federal policy undertaken to allow the largest U.S. state to combat air pollution that particularly afflicts Los Angeles.

Eliminating California's electric vehicle mandate could hurt automakers like Tesla Inc <TSLA.O> and General Motors Co <GM.N>, which are already investing billions in EVs.

Relying on the state's regulatory authority, California Governor Jerry Brown, a Democrat, set a target in January of putting 5 million zero-emission vehicles on the roads in California by 2030, up from a prior goal of 1.5 million by 2025.

(Reporting by Joe White, additional reporting by David Shepardson; Editing by Tom Brown and Ben Klayman)

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