EPA submits emission reduction plan to White House

The U.S. Environmental Protection Agency (EPA) has delivered its proposed plan for substantial emissions cuts in new cars and trucks through 2032 to the White House for review, according to a document disclosed on Friday. The proposal, initially introduced in April, outlines a 56% reduction in projected fleet average emissions by the 2026 model year requirements.

As per the EPA’s initial proposal, automakers are expected to achieve a notable increase in electric vehicle (EV) production, reaching 60% by 2030 and 67% by 2032 to meet the stringent emissions requirements. This move has sparked a divide in the automotive industry, with a major automaker group criticising the plan as “neither reasonable nor achievable,” while environmentalists, Tesla, and numerous Democratic lawmakers advocate for more stringent regulations.

The draft final rule, submitted to the White House Office of Information and Regulatory Affairs late on Thursday, is currently undergoing interagency review after receiving over 250,000 public comments. The EPA aims to finalise the new emissions rules by March.

This proposal is one of three significant vehicle rules being considered by the EPA, the Department of Transportation (DOT), and the Department of Energy, potentially reshaping the American automotive landscape. Last month, the Alliance for Automotive Innovation, representing major automakers such as General Motors, Toyota, Volkswagen, Ford, and Stellantis, urged the Biden administration to make substantial revisions to the proposed rules, warning of potential consequences leading car companies to hastily cease gas-powered vehicle production.

Deputy Transportation Secretary Polly Trottenberg highlighted the ongoing collaboration between the three agencies to find a solution that aligns with climate goals while accommodating the auto industry’s needs. Automakers, however, have raised concerns about the proposed rules, asserting that they could result in significant fines, with estimates reaching USD 14 billion, including USD 6.5 billion for GM and USD 3 billion for Stellantis.

In July, the National Highway Traffic Safety Administration, under the DOT, proposed increasing Corporate Average Fuel Economy (CAFE) standards by 2032 to a fleet-wide average of 58 miles per gallon. This involves a 2% annual boost for passenger cars and a 4% annual increase for pickup trucks and SUVs. U.S. automakers are advocating for a reduction in the annual increase for light trucks to 2%.

Simultaneously, the Department of Energy has proposed changes to how electric vehicles are treated for compliance purposes, a move contested by automakers who argue it could significantly devalue EV fuel economy by 72%.

As the EPA’s emissions reduction plan undergoes review, the automotive industry braces for potential shifts that could impact production, sales, and the trajectory of the electric vehicle market in the United States.