A new proposal will reportedly head to the White House for review.
The Environmental Protection Agency (EPA) and the National Highway Traffic Safety Administration (NHTSA) are working on a plan to revoke California’s authority to set its own greenhouse gas emissions standards, according to a recent Reuters report. Two people close to the matter spoke on the condition of anonymity, saying the agencies will submit the plan for White House regulatory review. The move comes as the Trump administration expressed its frustration at California’s recent deal with automakers on fuel economy and emissions standards.
In another development Friday, the Justice Department launched a preliminary antitrust investigation into the four automakers that struck a deal with California violated federal competition law, according to a Wall Street Journal piece. Those four automakers — BMW, Ford, Honda and Volkswagen — reached an agreement with California in late July. A source close to the investigation said the Justice Department took the step independently of any White House directive. However, the Trump administration is aiming to block California’s emissions deal by enacting a so-called “One National Program rule”. The rule aims to set a single national standard for fuel economy and emissions.
Currently, the administration wants to roll back Obama-era fuel economy standards set through 2025. The earlier voluntary deal between California automakers takes a more aggressive approach than what the White House proposed, but still compromises on the earlier standards set in 2012.
Of the Justice Department investigation, the source told The Wall Street Journal:
“Justice Department lawyers are seeking to determine if Ford Motor Co., Honda Motor Co., BMW AG, and Volkswagen AG violated federal competition law by agreeing with each other to follow tailpipe-emissions standards beyond those proposed by the Trump administration.”
These latest events escalate the tensions between the state of California and the federal government, and builds uncertainty for where the consumers will feel the impact in the future. The Trump administration argues that rolling back standards will lower new vehicle prices by $1,850, according to the earlier Reuters report. However, the Environmental Defense Fund says customers will actually pay $200 more each year in fuel costs, as they’ll be driving less efficient vehicles.
California is the United States’ largest automotive market. That fact compelled automakers to strike some sort of compromise. It’s a market they can’t afford to lose. However, if federal agencies win in their efforts to strip the state of their ability to restrict new car sales based on emissions standards, then automakers may well fall back to making less efficient vehicles after all.
Regardless of whether the Justice Department’s claim to independence is true, the outcome of its investigation and the efforts of the EPA and NHTSA may dramatically shift how the automotive landscape will look in the coming decade, against how it may have been under the original Obama-era policies.
