Trump Administration to Reveal Final Plan for Revoking California Waiver on Emissions

Date: September 18, 2019
Source: Wall Street Journal

MEMA Industry News Editor’s Note: MEMA has consistently supported a One National Program negotiated with California. MEMA has repeatedly urged the National Highway Traffic Safety Administration (NHTSA) and the U.S. Environmental Protection Agency (EPA) to come to a coordinated agreement with the California’s Air Resources Board (CARB) on the Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule for model years 2021-2026 for passenger cars and light trucks. The motor vehicle industry, including parts suppliers, has been united in requesting that the Trump administration and California work towards an agreement on the SAFE Vehicles rulemaking. If California’s waiver is revoked, the action could initiate lengthy litigation. This could contribute to on-going regulatory uncertainty, which could have damaging effects on industry’s ability to invest and plan for the future and impact industry’s ability to grow jobs.

The Trump administration plans Wednesday to revoke California’s federal waiver for setting its own tailpipe-emissions rules, according to people briefed on the plans, further escalating a fight that has challenged the auto industry.

The White House first proposed the revocation last year as part of an effort to revise fuel-economy requirements for car companies set in 2012 under the Obama administration. California has long had the authority to set its own rules on limiting air pollutants from cars, but the Trump administration believes such requirements should be set by the federal government, not a state.

The move to rescind the waiver is still under review and could be delayed, according to one administration official.

Andrew Wheeler, head of the Environmental Protection Agency, told a car dealer trade group Tuesday that the administration would be taking action imminently but he didn’t offer specific timing.

“In the very near future, the Trump administration will begin taking the steps necessary to establish one set of national fuel-economy standards,” Mr. Wheeler said.

Rescinding the waiver would fulfill a longstanding goal of the administration to curb California’s influence over the car industry with its ability to set more stringent emissions rules than federal mandates. In July, four car companies— Ford Motor Co. , Honda Motor Co. , Volkswagen AG and BMW AG —signed an agreement with California to meet tougher emission requirements than those proposed by the Trump administration.

In response, the White House directed regulators to accelerate efforts to remove California’s waiver, according to people familiar with the plan, and make that plan separate from their broader efforts to rollback fuel-economy rules.

The development is the latest in the fierce fight between the administration and California, the nation’s most populous state, which has said it would defend its waiver in court. The clash is expected to result in a protracted legal battle that the car industry had been hoping to avoid.

Auto makers had for years lobbied the White House to relax the existing fuel economy rules, which require them to steadily increase gas mileage and reduce greenhouse-gas emissions on their car fleets. The companies argued that surging consumer demand for larger trucks and SUVs has made the efficiency targets harder to achieve.

But when the administration proposed last summer to freeze the rules at the current levels and revoke California’s waiver, car companies worried that the resulting legal challenges would create more uncertainty.

California has already taken legal action to block the White House’s efforts and threatened more lawsuits.

“We will fight this latest attempt and defend our clean car standards,” said Gov. Gavin Newsom in a statement Tuesday afternoon.

The administration has been taking pains to ensure its rule-making process would survive a legal challenge that could go before the U.S. Supreme Court, a White House official said.

California will likely ask a judge for a stay to keep the current rules in place, a move that could force auto makers to comply with those regulations, while waiting to see which standards ultimately prevail, say legal experts.

—Andrew Restuccia and Alex Leary contributed to this article.

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