A group of major automakers on Thursday backed a compromise on vehicle emissions aimed at heading off a confrontation between California and the Trump administration. At issue are Obama-era standards that require annual decreases of vehicle emissions. The automakers warned that the lack of a deal could lead to “an extended period of litigation and instability.”
In a letter to California Governor Gavin Newsom signed by 17 major automakers including General Motors Co, Toyota Motor Corp and Volkswagen AG, the companies urged a compromise “midway” between the Obama-era standards that require annual decreases of about five percent in emissions and the Trump administration’s proposal that would freeze vehicle emissions requirements at 2020 levels through 2026.
The automakers are trying to revive talks in order to avoid years of uncertainty over what rules they will face.
In a separate letter to President Donald Trump on Thursday, they urged “both the federal government and California to resume discussions and to remain open to regulatory adjustments.”
The letters were also signed by Daimler AG, Hyundai Motor Co and Honda Motor Co Ltd. The companies said a final deal should “also include flexibilities that promote advanced technology for the sake of long-term environmental gains and US global competitiveness.” The letters were not signed by Fiat Chrysler Automobiles NV.
In February, the Trump administration ended talks with California over federal plans to roll back fuel economy rules, setting the stage for what could be a lengthy legal fight over the state’s ability to regulate greenhouse gas emissions.
White House spokesman Judd Deere said on Thursday that California had “failed to put forward a productive alternative,” adding that the Trump administration was “moving forward to finalise a rule with the goal of promoting safer, cleaner, and more affordable vehicles.”
California did not immediately comment on Thursday.
The automakers told Trump a deal “would provide regulatory certainty and enhance [their] ability to invest and innovate by avoiding an extended period of litigation and instability, which could prove as untenable as the current programme.
Automakers previously said they opposed a freeze but wanted the rules revised to account for changes in oil prices and consumer demand.
What happens in California is important because its rules have been adopted by more than a dozen states. Eighteen states, including California, have vowed to sue the administration if it finalises the freeze.
In August 2018, the Environmental Protection Agency (EPA) and the National Highway Traffic Safety Administration (NHTSA) called for stripping California of the right to impose stricter emissions rules or to require a rising number of zero-emissions vehicles.
California Air Resources Board chair Mary Nichols warned that the increasing need to fight climate change “might lead to an outright ban on internal combustion engines.” She later told California news website Calmatters.org that no ban was imminent and that her warning was part of draft remarks released by the agency. “The message here was intended to be heard by the auto industry,” she told the site.
The House Energy and Commerce Committee is planning to call Trump administration officials to give evidence at a hearing on the vehicle emissions proposal during the week of June 17, two people briefed on the matter said.
In April, Reuters reported that the EPA was expected to require a small increase in the yearly fuel efficiency gains but said the precise figure had not been finalised. EPA Administrator Andrew Wheeler in April told Reuters that “our final regulation is not going to be the same as our proposal.”
California has been allowed to set state standards that are stricter than federal rules under an exemption granted by the EPA.
EPA and NHTSA have not yet submitted their proposal to the White House Office of Management and Budget for review, a necessary step before the final regulation can be published.
The Trump plan would increase US oil consumption by about 500,000 barrels per day by the 2030s but reduce automakers’ regulatory costs by more than $300bn, the agencies said.