Automakers, Parts Suppliers at Odds Over EPA Emissions Standards

Source: By Abby Smith, Bloomberg/BNA • Posted: Thursday, September 7, 2017

Automakers and the companies that supply their equipment are at odds over the EPA’s suggestion that it could revamp greenhouse gas emissions limits for model year 2021 passenger cars and trucks.

Major automobile manufacturing groups like the Alliance for Automobile Manufacturers, which represents the Ford Motor Co., Fiat Chrysler Automobiles, General Motors, BMW, and others, have urged the Environmental Protection Agency to ease compliance with the emissions limits for 2021 vehicles.

That puts automakers at odds with the Motor & Equipment Manufacturers Association, which represents manufacturers and suppliers of auto equipment. The suppliers group warns that any relaxation of the model year 2021 standards would hurt manufacturing jobs in the U.S.

Ann Wilson, senior vice president of government affairs for the group, told Bloomberg BNA that motor vehicle suppliers are the “largest employer of manufacturing jobs in the United States.” Many of those jobs “have been contingent on compliance with the new” National Highway Traffic Safety Administration and EPA vehicle standards, she said, and suppliers already have dedicated millions of dollars in research and development.

The EPA in March decided to review the joint greenhouse gas and fuel efficiency standards for model years 2022–2025, despite the Obama administration’s conclusion that meeting the requirements was feasible. The Trump administration subsequently expanded the review to include potential changes to model year 2021 limits, drawing criticism from environmentalists and other supporters of the Obama-era rules.

Push for Harmonization

But vehicle manufacturers such as the Alliance of Automobile Manufacturers and Global Automakers said the EPA needs to tweak the 2021 emissions limits so they better align with the NHTSA’s fuel economy requirements for that year.

“We never meaningfully reached the goals of harmonization,” Julia Rege of Global Automakers said during testimony at the EPA’s Sept. 6 hearing on the standards. An adjustment to the 2021 standards “would advance our request” to align the two programs.

The two auto groups in June 2016 petitioned the Obama administration to address “inconsistencies” between the NHTSA fuel economy program and the EPA greenhouse gas standards. The NHTSA has indicated that it will address the harmonization petition during its pending review, though the EPA has not outlined its plan to address those concerns.

EPA officials at the hearing pushed automaker representatives to outline more specifically how changes to the model year 2021 limits would contribute to harmonization, questioning whether industry was seeking consideration of “inconsistencies” noted in their earlier petition or a broader change to the emissions limits that model year.

“We’re looking for harmonization any way we can get it,” Chris Nevers of the auto alliance said, adding that a review of the model year 2021 standards is “another avenue.”

Suppliers Out Front

Defenders of the Obama-era rules, however, argued that the automakers’ push is a veiled attempt to weaken the overall greenhouse gas standards.

Jack Gillis of the Consumer Federation of America said he suspects the “outcry for harmonization” is a “straw dog for a rollback.”

“You’re not re-examining it to improve it or to maintain the status quo. You’re only re-examining it to roll it back,” he told Bloomberg BNA.

Gillis said groups like the Motor & Equipment Manufacturers Association back progress on the vehicle limits because they’re often the ones making the investments that drive technological advancements needed to meet the standards.

Regulations like the EPA’s “help provide some of that certainty that encourages them to invest. … If the standards are relaxed, that certainty goes away,” Dave Cooke, a senior vehicles analyst at the Union of Concerned Scientists, told Bloomberg BNA.

Wilson said her group is hoping there will be a definitive role for suppliers at the table during forthcoming negotiations over the EPA limits. The Trump administration and the rest of the auto industry seem “very open to this process,” she said, but “the burden is on us to define what that process should continue to look like.”

Pandora’s Box

But Cooke said it was unlikely the auto industry will find certainty in the near term. He cited divisions also among the car companies on their end goals for the EPA’s review—which range from a complete rollback of the rules to minor tweaks to the program.

He said the Obama EPA’s determination in January that the existing standards were achievable offered regulatory certainty. “Instead, [the auto industry] decided that they would rather blow the whole thing up and see what happens. They opened Pandora’s box,” Cooke said.