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California’s fight over fuel economy standards

Rush-hour traffic in downtown Los Angeles. (Photo: TierneyMJ, via Shutterstock)

Top law enforcement officials in California and New York are leading 10 other states in an attempt to retain tougher penalties for automakers that violate fuel economy standards.

They filed a federal lawsuit against the Trump administration, challenging the federal government’s decision to block a scheduled increase in the penalties for those who fail to meet fuel economy standards. The Aug. 2 suit targets a ruling by the National Highway Traffic Safety Administration (NHTSA).

The 2015 Congressional Act was an effort to re-examine civil fines across government, so companies do not opt to pay fines as a way to bypass meeting various standards.

The rule replaces a 2016 Obama administration regulation that imposed a complex, inflation-adjusted penalty against automakers of $14 for every tenth-of-a-mile per gallon that the car manufacturers exceed the corporate average fuel economy standards (CAFE).

The NHTSA’s new decision would reduce automakers’ CAFE violation penalty to $5.50 per each tenth-of-a-mile per gallon, which the states argue is well below the inflation-adjusted penalty required by the 2015 Federal Civil Penalties Inflation Adjustment Act. Along with California and New York, the states involved in the litigation are Connecticut, Delaware, Illinois, Maryland, Massachusetts, New Jersey, Oregon, Rhode Island, Vermont, Washington state, plus the District of Columbia.

The 2015 Congressional Act was an effort to re-examine civil fines across government, so companies do not opt to pay fines as a way to bypass meeting various standards. It was in response to this act that in 2016 the NHTSA under Obama’s raised the penalty fines from $5.50 to $14 in the first place.

The NHTSA, however, contends that setting the fines back to $5.50 is within their intent to follow the congressional mandate.

“We’ll take on this latest wrong-headed maneuver with the same vigor that defeated the Administration’s first attempt at backsliding.” said Attorney General Becerra as California had already battled against Trump in court over another proposed CAFE freeze in June of last year.

The Obama administration had called for a 46.7 mile per gallon fleet-wide fuel efficiency average by 2026. However, last August the NHTSA in a joint decision with the EPA proposed to freeze fuel economy standards at 2020 levels through 2026. This lead California along 16 states and the District of Columbia to sue the EPA. Around 23 state Governors wrote the EPA in protest of the freeze as well.

The EPA’s current plan aims to freeze standards at an average at 37 mpg for cars and trucks with the final plan expected to include small year to year increases through 2025. The EPA could release its final plan after labor day, and if the standards are indeed frozen, this prior lawsuit will likely move forward in court.

“We will continue to enforce our regulations and pursue legal challenges to the federal rule.” Mary D. Nichols

With automakers already developing 2023 models, this could lead to years of uncertainty and divisions in state standards. In a June letter, 17 automakers appealed  California and the White House to work together towards a national standard, emphasizing the risk of job loss and adverse effects on the auto market.

In July, California was able to score a deal with at least four major automakers to enact stricter standards for gas mileage and greenhouse emissions. The agreement with BMW, Ford, Honda, and Volkswagen circumvents the Trump Administration’s effort to be more lenient in terms of nationwide mileage standards.

“If the White House does not agree, we will move forward with our current standards but work with individual carmakers to implement these principles. At the same time, if the current federal vehicle standards proposal is finalized, we will continue to enforce our regulations and pursue legal challenges to the federal rule.” said California Air Ressources Board Chair Mary D. Nichols ahead of the anticipated federal decision.

California is the only state under a 1970s extension of the Clean Air Act that has the right to set tighter emission standards than the federal government as its state requirements predated the EPA’s. For instance, California requires major automakers to sell a certain portion of electric cars in order to be able to sell other types of vehicles.

States have the option to either follow federal emission standards or California’s stricter rules, but they cannot set their own. For example, thirteen states and the District of Columbia preferred to follow California’s standard for gas cars, nine of which adopted California’s electric car requirement. Some states amongst those who have joined California in its lawsuits are likely to strike similar deals with automakers in the future.

Editor’s Note: Nahima Shaffer is a Capitol Weekly intern from UC Davis.


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