EPA: No Reason to Change Vehicle Standards

In a maneuver intended to fortify its greenhouse gas (GHG) emissions standards for model year (MY) 2022–2025 cars and light-duty trucks, the EPA has issued a final midterm evaluation (MTE) of the appropriateness of those standards 16 months before the Agency’s self-imposed deadline for delivery.

In the MTE, the Agency states that the 2022–2025 standards remain appropriate under every major criterion, including technologies available to automakers, reduced GHG emissions, other health and environmental benefits, cost to manufacturers, increased fuel efficiency, and vehicle price. In its 2012 final regulations establishing vehicle GHG standards for MY 2017–2025, the Agency announced its intention to provide the MTE no later than April 1, 2018. However, the Agency now states that the rules did not constrain the EPA from selecting an earlier determination date. Release of the final MTE follows the publication of the draft MTE by only 21/2 months.

“The Administrator is choosing to make the final determination now, recognizing that long-term regulatory certainty and stability are important for the automotive industry and will contribute to the continued success of the program, which in turn will reduce emissions, improve fuel economy, deliver significant fuel savings to customers, and benefit public health and welfare,” says the EPA.

The Agency said it received more than 100,000 public comments on the draft, including comments from about 60 organizations, and adds that those comments “informed” the final MTE. As with regulatory actions the EPA is hurrying to finalization, it is likely that the early release of the MTE has been influenced by the change in administrations.

“My decision today rests on the technical record created by over eight years of research, hundreds of published reports, including an independent review by the National Academy of Sciences, hundreds of stakeholder meetings, and multiple opportunities for the public and the industry to provide input,” said EPA Administrator Gina McCarthy.

Extensive Electrification Not Needed

The MTE finds that the MY 2022–2025 vehicle standards remain appropriate for the following principal reasons:

• The standards are feasible at reasonable cost without need for extensive electrification. According to the EPA, compliance can be achieved through a number of different technology pathways reflecting predominantly the application of technologies already in commercial production. The Agency further projects that the MY 2022–2025 standards can be met largely through advances in gasoline vehicle technologies, such as improvements in engines, transmissions, light-weighting, aerodynamics, and accessories, and there are multiple available compliance pathways based on the predominant use of these technologies. The analyses also indicate that very low levels of hybrids and electric vehicles will be needed to meet the standards.
• The standards will achieve significant carbon dioxide (CO2) and oil reductions. The footprint-based GHG standards curves for MY 2022–2025 are projected to achieve an industrywide fleet average CO2 target of 173 grams/mile in MY 2025. The projected fleet average CO2 target represents a two-cycle GHG emissions compliance level equivalent to 51.4 mile per gallon equivalent (mpg-e) if all reductions were achieved exclusively through fuel economy improvements. The EPA says it does not expect the GHG standards to be met only with fuel efficiency technology. The Agency projects that this GHG compliance level of 51.4 mpg-e could be met by automakers with average real-world/label fuel economy of about 36 mpg. The Agency estimates that over the vehicle lifetimes, the MY 2022–2025 standards will reduce GHG emissions by 540 million metric tons and reduce oil consumption by 1.2 billion barrels,
• The standards will provide significant benefits to consumers and the public.The net benefits of the MY 2022–2025 standards are nearly $100 billion (at 3 percent discount rate). Consumers would realize net savings of $1,650 over the lifetime of their new vehicle (i.e., net of increased lifetime costs and lifetime fuel savings). Even with the lowest fuel prices projected (approximately $2 per gallon in 2025), the lifetime fuel savings significantly outweigh the increased lifetime costs.
• The auto industry is thriving and meeting the standards more quickly than required.While the MTE focuses on the MY 2022–2025 standards, the EPA notes that the auto industry, on average, has outperformed the first 4 years of the light-duty GHG standards (MY 2012–2015). This has occurred concurrently with a period during which the industry successfully rebounded after a period of economic distress. Furthermore, sales have increased for 7 straight years for the first time in 100 years to an all-time record high in 2016, reflecting positive consumer response to vehicles meeting the standards, says the Agency.

The MTE is here.