Automakers seek changes to fuel economy rules

Source: Camille von Kaenel, E&E reporter • Posted: Saturday, June 25, 2016

Automakers have asked for a change in the federal fuel economy program to make it easier to meet tightening emissions requirements, a move that is worrying environmental and consumer advocates.

The Alliance of Automobile Manufacturers and the Association of Global Automakers sent a petition Monday to the agencies in charge of the standards for greenhouse gas emissions and corporate average fuel economy (CAFE), U.S. EPA and the National Highway Traffic Safety Administration. In it, they ask for new rules that would essentially increase the number of cars in compliance.

Automakers can meet the requirement set by one agency yet still be fined by the other, the petition says, so they’re asking for better harmonization between the two.

“The actions requested are appropriate … because they are essentially technical amendments relating to inconsistencies, errors, or procedural issues with respect to the CAFE and GHG programs,” the groups wrote. “They do not impact the stringency of the standards as originally intended, nor are they contrary to the underlying analyses upon which the standards were based.”

Environmental advocates still trying to understand the list of technical amendments have criticized the demands, saying they make it easier for automakers to put less fuel-efficient cars on the roads.

“It’s all about trying to figure out new ways to gain flexibilities out of this system,” said Dave Cooke, senior vehicles analyst at the Union of Concerned Scientists. “It’s frustrating they’re trying to change the rules halfway through the game.”

Discrepancies between agencies

The standards, set in 2012 and lauded by the Obama administration as a historic move to reduce dependence on foreign oil and curb greenhouse gas emissions from transportation, require yearly improvements in the average fuel efficiency of vehicles sold in each size category. The final score can also factor in technologies that reduce greenhouse gas emissions but aren’t part of the engine itself, like aerodynamic exterior glazing or efficient lighting.

Year after year, automakers have met and even exceeded the requirements, partly by making use of these “off-cycle” technologies. Overcomplying gives them extra credits they can count toward future scores. Now, they are mostly on track to double the fuel efficiency of cars and trucks by 2025 but have said the increasingly tight standards present a challenge.

Part of that challenge is dealing with discrepancies between the programs, said Wade Newton, a spokesman for the Alliance of Automobile Manufacturers. Three agencies — EPA, NHTSA and California’s Air Resources Board — authorized by several different laws worked together to design the standards, dubbed the National Program.

But slight differences remain, causing “impediments,” according to the petition. An automaker could find itself meeting the more numerically stringent EPA requirement but paying fines to NHTSA for noncompliance with its program, said Newton.

To fix that, the trade groups listed nine technical requests. Most of them would increase the number of cars in compliance.

For example, automakers can’t count air conditioning efficiencies the same way under the NHTSA and EPA programs, according to the petition. They’re asking NHTSA to retroactively recognize those technologies and improve the scores of model year 2012-16 cars.

More cars in compliance

If granted, those extra credits would ease the burden for meeting upcoming 2017-25 requirements because they would carry over, experts said.

Luke Tonachel, who works on clean vehicles and fuels at the Natural Resources Defense Council, called the retroactive nature of the requests “concerning.”

“Giving new credits for cars already on the road is a windfall that could allow for more polluting vehicles in the future, increasing the risk to the environment and public health,” he wrote in an email.

A new survey by the Consumers Union released yesterday found that drivers named fuel economy as the top characteristic they want to see improved in their car. More than 80 percent said they believe making larger vehicles more efficient is important.

“This shows that consumers overwhelmingly want strong fuel economy standards, and this petition seems to move in the opposite direction of that,” said Shannon Baker-Branstetter, energy and environment policy counsel for the Consumers Union.

The automakers denied that their requests would have an impact on the strictness of standards or the ultimate fuel savings.

“This doesn’t change the stringency of the standards as originally intended,” Newton said. “For most of these, this is how we thought it was going to work for from the get-go.”

Statutory changes or midterm review?

The petition’s nine requests target only the agencies’ implementation, not the original statutes. But the trade groups wrote that “certain aspects of the programs will require legislative change to ensure consistency,” suggesting they are working on new legislation that could go even further than the petition.

An EPA spokeswoman said the agency would review the petition and respond appropriately. NHTSA did not respond to a request for comment.

The petition comes a week before a midterm review of the rules by the agencies is set to kick off. By 2018, the agencies will have to decide whether to tighten, maintain or loosen the standards.

Because the review is likely to include an analysis of the programs’ discrepancies, as well as of technological possibilities and changes in consumer preferences, the timing of the petition confused some environmental advocates. Newton responded that the requests are “not a midterm issue.”

Automakers’ concerns about poor harmonization between the country’s different clean transportation programs have arisen before. California’s zero-emissions vehicle mandate, which is separate from its tailpipe greenhouse gas emissions program, requires electric cars to make up 15 percent of sales by 2025. A February report sponsored by the Alliance of Automobile Manufacturers argued that the agencies should re-examine the effects that has on the fuel economy program, and vice versa.

“The California regulators are compelling the industry to invest powertrain resources in a different direction than [the] federal program,” said John Graham, the dean of Indiana University’s School of Public and Environmental Affairs and one of the authors of the report, in an interview last month.