Automakers rebuff Trump, strike fuel efficiency deal with California

Automakers have struck a deal with California that would circumvent the Trump administration’s pending freeze of fuel efficiency standards.

Four automakers agreed Thursday to produce vehicles that could average 50 mpg by 2026, undercutting efforts by the Trump administration to freeze them at 37 mpg.

{mosads}The proposed rollback from the Trump administration has set up a clash with California which, for decades, has been allowed to create its own stricter standard that has in turn been adopted by other states.

The deal between the California Air Resources Board and Honda, Volkswagen, Ford and BMW of North America gives the companies an extra year to meet standards that are nearly as ambitious as those developed under former President Obama, designed to end the dueling federal and state fuel standards.

The four automakers that signed on to the deal represent just 30 percent of the market, but that could grow as other manufacturers dissatisfied with the federal-state spat join the deal–something California is advocating.

“This agreement represents a feasible and acceptable path to accomplishing the goals of California and the automobile industry,” said CARB Chair Mary D. Nichols. “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.”

A joint statement from the automakers said they struck the deal out of a need for consistency.

“These terms will provide our companies much-needed regulatory certainty by allowing us to meet both federal and state requirements with a single national fleet, avoiding a patchwork of regulations while continuing to ensure meaningful greenhouse gas emissions reductions,” the group said.

The Trump administration has claimed the lowering fuel efficiency standards will help people afford new cars, but critics say it will help fast-track greenhouse gas emissions from transportation–already the largest sector of such pollution.

The four automakers that signed on to the deal represent just 30 percent of the market, but that could grow as other manufacturers dissatisfied with the federal-state spat could join the deal.

Though automakers initially supported the concept of a change to the Obama-era fuel standards, they changed course as the Trump administration plans developed.

The administration and California, alongside other states, have been feuding over the fuel rollback.

Negotiations between the Environmental Protection Agency (EPA) and the National Highway Traffic Safety Administration (NHTSA), the two agencies that develop the fuel standard, have been at a standstill.

That tension was showcased in Congress in June, when Nichols came to testify before Congress, only to have EPA Administrator Andrew Wheeler send a letter to lawmakers beforehand with his explanation for why negotiations had broken down.

The Trump administration contends freezing fuel efficiency standards will help keep the cost of cars down, helping consumers replace old cars with new ones that are safer and more fuel efficient.

“We know that consumers are less likely to replace their older, less safe car with a newer, safer car if that newer, safer car is 20 percent more expensive,” Heidi King, deputy administrator NHTSA, told lawmakers in June.

But several lawmakers said such a move stands to benefit only the oil industry.

“What exactly are you hoping to accomplish?” Rep. Paul Tonko (D-N.Y.) asked administration officials as they appeared before the House Energy and Commerce Committee.

“At best it isn’t clear. A reasonable observer would be forgiven for seeing an Administration so blinded by contempt for its predecessors and so willing to hurt consumers to support oil companies at any cost that it would defy science and common sense to move forward with a proposal with near universal condemnation from stakeholders,” Tonko added.

The EPA said they would continue to pursue one national standard.

“Today’s announcement from CARB has no impact on EPA’s regulation of greenhouse gas emissions under the Clean Air Act. This voluntary framework is a PR stunt that does nothing to further the one national standard that will provide certainty and relief for American consumers. As the Administration stated earlier this year, despite our best efforts to reach a common-sense solution with CARB, they continually refused to produce reasonable and responsible proposals,” Michael Abboud, an EPA spokesman, said in an email to The Hill.

Democrats from California and Michigan, a state with a strong auto industry presence, praised the deal.

“This move highlights that the Trump EPA’s so-called ‘SAFE Vehicles’ rule is dead on arrival. It’s bad for our climate. It’s bad for consumers. It’s bad for the auto industry,” said Rep. Doris Mastui (D-Calif.), “I strongly urge all automakers to support this reasonable path forward that could prevent years of litigation and economic uncertainty.”

Rep. Debbie Dingell (D-Mich.) hopes the agreement will be used to drive EPA back to the bargaining table.

“This is a positive development. The auto industry needs certainty. This industry is more fragile than many realize. If the United States is to be competitive, we have to stay at the forefront of innovation and technology, which will help us transition to the next generation of more fuel-efficient vehicles,” she said in a statement. “I would urge this framework to be a catalyst for all stakeholders to go back to the table. It would be win-win for everyone.”

Updated at 2:54 p.m.