T his report addresses frequently asked questions about the federal and state standards that regulate fuel economy and greenhouse gas (GHG) emissions from new passenger cars and light trucks. The regulations include the Corporate Average Fuel Economy (CAFE) standards promulgated by the U.S. Department of Transportation's National Highway Traffic Safety Administration (NHTSA), the Light-Duty Vehicle GHG emissions standards promulgated by the U.S. Environmental Protection Agency (EPA), and California's Advanced Clean Car program. These are known as the Phase 1 standards. NHTSA and EPA promulgated the second (current) phase of CAFE and GHG emissions standards affecting MY 2017-2025 light-duty vehicles on October 15, 2012. Like the Phase 1 standards, the Phase 2 standards were preceded by a multiparty agreement, brokered by the White House. The Phase 2 agreement involved the State of California, 13 auto manufacturers, and the United Auto Workers union. The manufacturers agreed to reduce GHG emissions from new passenger cars and light trucks by about 50% by 2025, compared to 2010, with fleet-wide average fuel economy rising to nearly 50 miles per gallon. As part of the Phase 2 rulemaking, EPA and NHTSA made a commitment to conduct a midterm evaluation (MTE) for the latter half of the standards, MYs 2022-2025. EPA, NHTSA, and California also have differing statutory obligations. On November 30, 2016, the Obama Administration's EPA released a proposed determination stating that the MY 2022-2025 standards remained appropriate and that a rulemaking to change them was not warranted. On January 12, 2017, then-EPA Administrator Gina McCarthy finalized the determination, stating that "the standards adopted in 2012 by the EPA remain feasible, practical and appropriate." On March 15, 2017, after President Trump took office, EPA and NHTSA announced their joint intention to reconsider the Obama Administration's final determination and reopen the midterm evaluation process. On April 2, 2018, EPA released a revised final determination, stating that the MY 2022-2025 standards are "not appropriate and, therefore, should be revised." These factors include
the availability and effectiveness of technology, and the appropriate lead time for introduction of technology; the cost to the producers or purchasers of new motor vehicles or new motor vehicle engines; the feasibility and practicability of the standards; the impact of the standards on emissions reduction, oil conservation, energy security, and fuel savings by consumers; the impact of the standards on the automobile industry; the impact of the standards on automobile safety; the impact of the GHG emissions standards on the CAFE standards and a national harmonized program; and the impact of the standards on other relevant factors. Until that new rulemaking is completed, the current standards remain in effect. In response to the announcements from the Trump Administration regarding potential revisions to standards, California restated its "continued support for the current National Program and California's standards." On March 24, 2017, CARB passed a resolution to accept its staff's midterm evaluation of the state's Advanced Clean Car program—which includes MY 2017-2025 vehicle GHG standards in line with EPA's 2017 final determination and the 2012 rulemaking. However, because EPA has concluded in its revised final determination that the MY 2022-2025 GHG emissions standards for light-duty vehicles "are not appropriate and, therefore, should be revised," the agency might decide to reconsider California's preemption waiver for the state's GHG standards for MYs 2017-2025. Below is a selected list of broader policy issues regarding the CAFE and GHG emission standards, their design, purpose, and potential revision.
The Trump Administration announced on April 2, 2018, its intent to revise through rulemaking the federal standards that regulate fuel economy and greenhouse gas (GHG) emissions from new passenger cars and light trucks. These standards include the Corporate Average Fuel Economy (CAFE) standards promulgated by the U.S. Department of Transportation's National Highway Traffic Safety Administration (NHTSA) and the Light-Duty Vehicle GHG emissions standards promulgated by the U.S. Environmental Protection Agency (EPA). They are known collectively—along with California's Advanced Clean Car program—as the National Program.
NHTSA and EPA promulgated the second (current) phase of CAFE and GHG emissions standards affecting model year (MY) 2017-2025 light-duty vehicles on October 15, 2012. Like the initial phase of standards for MYs 2012-2016, the Phase 2 rulemaking was preceded by a multiparty agreement, brokered by the White House. The agreement included the State of California, 13 auto manufacturers, and the United Auto Workers union. The manufacturers agreed to reduce GHG emissions from most new passenger cars, sport utility vehicles, vans, and pickup trucks by about 50% by 2025, compared to 2010, with fleet-wide fuel economy rising to nearly 50 miles per gallon.
As part of the Phase 2 rulemaking, EPA and NHTSA made a commitment to conduct a midterm evaluation for the latter half of the standards (i.e., MYs 2022-2025, for which EPA had finalized requirements and NHTSA, due to statutory limits, had proposed "augural" requirements). On November 30, 2016, the Obama Administration's EPA released a proposed determination stating that the MY 2022-2025 standards remained appropriate and that a rulemaking to change them was not warranted. On January 12, 2017, EPA finalized the determination, stating "that the standards adopted in 2012 by the EPA remain feasible, practical and appropriate."
After President Trump took office, however, EPA and NHTSA announced their joint intention to reconsider the Obama Administration's final determination and reopen the midterm evaluation process. EPA released a revised final determination on April 2, 2018. It stated the MY 2022-2025 standards were "not appropriate and, therefore, should be revised," and that key assumptions in the January 2017 final determination—including gasoline prices, technology costs, and consumer acceptance—"were optimistic or have significantly changed." With this revision, EPA and NHTSA announced that they would initiate a new rulemaking. Until that rulemaking is complete, the current standards would remain in force.
In response to the announcements from the Trump Administration, California has restated its "continued support for the current National Program and California's standards." On March 24, 2017, the California Air Resources Board (CARB) passed a resolution to accept its staff's midterm evaluation of the state's Advanced Clean Car program—which includes MY 2017-2025 vehicle GHG standards in line with EPA's 2017 final determination and the 2012 rulemaking. EPA granted CARB a Clean Air Act preemption waiver for its GHG standards on July 8, 2009.
A number of issues remain forefront regarding the CAFE and GHG emission standards, their design, purpose, and potential revision. These include (1) whether EPA has adequately justified its decision to revise the MY 2022-2025 standards and (2) whether California can continue to implement state standards that would be more stringent than the revised federal ones. These issues are informed by analyses regarding (1) whether the standards are technically and economically feasible; (2) the impact of the standards on GHG emissions and energy conservation; and (3) whether the standards adequately address consumer choice, safety, and other vehicle policies, both domestic and international.