Michael Jacob Steel, Christopher J. Carr, Robert S. Fleishman, and Ali A. Zaidi
Energy, Energy Regulatory, Environmental Permitting + Regulation, and Transportation
On March 15, 2017, the U.S. Environmental Protection Agency (EPA) announced that the agency and the U.S. Department of Transportation will jointly reconsider EPA’s January 12, 2017 determination not to change greenhouse gas (GHG) emission standards for light-duty cars and trucks manufactured in model years (MYs) 2022–2025. Although this decision does not alter the regulations finalized in 2012 that require automakers to achieve specified GHG emission–reduction standards for MYs 2022–2025, it does kick off a process of revisiting those requirements. The reconsideration responds to auto industry requests, and will be coordinated with the development by the National Highway Traffic Safety Administration (NHTSA) of Corporate Average Fuel Economy (CAFE) standards for those MYs.
The reconsideration announcement is among the first in a series of anticipated actions by the new administration to reverse the Climate Action Plan. Such actions are likely to be strenuously resisted by clean-energy interests and others—first before administrative agencies and, if necessary, in court.
The reconsideration announcement that will appear in the Federal Register makes explicit reference to two parallel processes that EPA and NHTSA will pursue jointly and individually. It also recognizes the unique role that the California Air Resources Board (CARB) has previously played.
The reconsideration announcement does not change the need for NHTSA to establish CAFE standards for MYs 2022–2025 at least 18 months before the beginning of each model year. As NHTSA has previously acknowledged, it must initiate and complete a full notice and comment rulemaking process to set fuel economy standards for those MYs. The Federal Register notice will make clear that this rulemaking process is being coordinated with the reconsideration to ensure that there continues to be one harmonized national program.
California‘s role in establishing nationwide standards has not changed. The Federal Register notice will not make prospective statements regarding the coordination between EPA, NHTSA, and CARB. CARB continues on its current course: to review California’s Advanced Clean Cars Program, including the Low and Zero Emission Vehicle regulations, Particulate Matter (PM) Standards, and GHG regulations. Public comment on CARB‘s “Midterm Review” is open until March 20.
When EPA reached its determination in January not to change the emissions standards, it explained that those standards will achieve significant reductions in carbon dioxide emissions and oil consumption; those standards are “feasible at reasonable cost, without need for extensive electrification” of the vehicle fleet; provide significant benefits to consumers and to the public; and would be implemented in the context of an “auto industry [that] is thriving and meeting the standards more quickly than required.” EPA cannot change that determination by fiat. As the Federal Register notice will emphasize, EPA has the authority to “revise, replace or repeal a decision to the extent permitted by law and supported by a reasoned explanation. FCC v. Fox Television Stations, Inc., 556 U.S. 502, 515 (2009).” If, based on its planned review, EPA determines that revisions to the 2012 final standards are necessary, it, like NHTSA, must undertake a formal rulemaking—with public notice and comment—to propose and finalize any revisions.
In the March 15 announcement, EPA commits to working closely with NHTSA and stakeholders to inform its decision-making. EPA also reaffirmed an April 2018 deadline for this reconsidered final determination. Absent a determination to the contrary, the current GHG emission standards for MYs 2022–2025 remain in place.
In its reaction to the reconsideration announcement, the auto industry signaled a desire to maintain ”One National Program”—a harmonization between EPA, NHTSA, and CARB. This harmonization objective, the diversity of stakeholders, complex and overlapping statutory responsibilities, and the existing record supporting the EPA’s January 2017 determination may together constrain the administration’s ability to make major changes to CAFE standards for MYs 2022–2025.
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