The Trump administration rolled back fuel efficiency standards for US cars and trucks on Tuesday, delivering on a presidential campaign promise and lowering the bar on emissions contributing to climate change.
The revised regulation released by the US National Highway Traffic Safety Administration and the US Environmental Protection Agency allows car manufacturers to average 40 miles per gallon across their product lines by 2026, rather than 54 miles per gallon.
Fuel economy standards under the rules will rise by 1.5 per cent each year through to 2026. Manufacturers would have needed to achieve 5 per cent gains annually under the previous standards set by President Barack Obama.
The agencies called the rollback “the largest deregulatory initiative of this administration”. Cabinet members claimed the changes would keep consumers safer by allowing them to afford new vehicles, dropping the average price of a new vehicle from $37,000 to $36,000.
“These standards are reasonable, realistic and achievable,” said the secretary of transportation, Elaine Chao. “This will be good for the economy as well.”
But the rollback would set back public health at a time when it already is threatened by a pandemic, said Howard Learner, executive director of the Environmental Law & Policy Center. It would add to pollution-related healthcare costs and increase how much car owners spent on petrol. Also, it would thwart the potential pay-off of investments made in electric vehicles by US automakers Ford and General Motors.
“It makes the auto industry less competitive with the European and Asian car manufacturers,” he said. “The administration’s own analysis shows there will be significantly higher health costs from the extra pollution, and it will cost consumers more at the pump over time.”
Researchers at the independent Rhodium Group estimate drivers will spend an extra $231bn on petrol between 2021 and 2035 when compared with the outlay if the Obama-era rule had remained in place.
About 20 states are expected to challenge the new regulations in court. California, which had obtained a waiver allowing it to set its own greenhouse gas emissions standards until President Donald Trump revoked it last year, has led the charge. The US Department of Justice is investigating several automakers that have agreed to meet the state’s higher standards.
The auto industry has split on whether to support the Trump Administration’s more lax rule or to side with California, which espouses emission standards that are tougher than the Federal rule but more lenient that the Obama-era regulation.
The legal limbo — and the November presidential election — both add to the uncertainty for manufacturers.
“Automakers have already solidified most of their plans up until 2026, and since the pendulum could swing back in the other direction during the next election cycle, it’s unlikely that they’d take on the risk of switching to less stringent guidelines, even if they could,” said Edmunds analyst Jessica Caldwell.
She added that the carmakers were unlikely to pass along savings from reduced regulations to consumers, given the drop in demand they are facing because of coronavirus.