White House announces rollback of fuel efficiency standards for automobile emissions

Society of Corporate Compliance and Ethics (SCCE)

Society of Corporate Compliance and Ethics (SCCE)

CEP Magazine (June 2020)

In the latest in an ongoing struggle between a coalition of states and the United States federal government, the Environmental Protection Agency and the National Highway Traffic Safety Administration finally presented their final rule for emissions standards[1] in the US on March 31. The data used by the Trump administration to reach their final rule is in dispute,[2] as is the entire rationale behind the move.

The new federal rule calls for a 1.5% annual boost in vehicle fuel efficiency, down from 5% under the current rule. By 2026, new cars would have to average about 40 miles per gallon instead of closer to 50 miles per gallon.

California is currently suing the Trump administration for revoking the state’s special status under the Clean Air Act,[3] which allows California to set its own emissions standards, and for rolling back emissions standards that are meant to combat climate change. The courts have yet to rule on all of the cases currently pending.

The struggle presents a significant compliance challenge for automobile manufacturers, which must wait for a resolution before being able to invest with confidence and, in the meantime, must contend with the fact that the US auto market is effectively fractured[4] until the courts make a ruling.

1 Environmental Protection Agency, “Final Rule: One National Program on Federal Preemption of State Fuel Economy Standards,” March 2020, https://bit.ly/2JEtgtv.
2 Ben Foldy, “Push to Roll Back Auto-Emissions Rules Hits a Roadblock,” The Wall Street Journal, February 29, 2020, https://on.wsj.com/3dU7XlC.
3 Coral Davenport, “Trump to Revoke California’s Authority to Set Stricter Auto Emissions Rules,” The New York Times, September 17, 2019, https://nyti.ms/3aGMkTz.
4 Sascha Matuszak, “Battle over emission standards heats up,” Report on Supply Chain Compliance 2, no. 21 (November 7, 2019), https://bit.ly/2JE3e9y.

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