The Alliance to Trump: Let’s Hit the Pause Button on Fuel Economy Standards

11.14.16 | Blog | By:

As I said last week, if any low carbon fuel and vehicle (LCFV) regulation is rolled back, it will be the federal fuel economy standards as applied in the years 2022-2025 and which are currently under review. And no sooner did I write those words did the Alliance of Automobile Manufacturers present its request to the incoming Trump Transition Team to, among other things, find “a pathway forward” on the future of the fuel economy standards. With respect to fuel economy, the Alliance laid out the problem from the auto industry’s perspective:

“In short, we believe the [mid-term review report] over-projects technology efficiencies and inadequately accounts for consumer acceptance and marketplace realities. These market factors are absolutely critical since automakers are ultimately judged by what consumers take out of showrooms across America, rather than what automakers put into those showrooms. The combination of low gas prices and the existing fuel efficiency gains from the early years of the program is undercutting consumer willingness to buy the vehicles with more expensive alternative powertrains that are necessary for the sector to comply with the more stringent standards in out-years.”

In addition to reviewing the 2022-2025 fuel economy standards, the Alliance recommended that the Trump Administration factor the cost of state ZEV mandates into the mid-term review.  Other recommendations included the following:

  • Comprehensive Regulatory Review. Undertake a comprehensive review of all regulations (final and proposed), interpretations of regulations, guidance, information disseminations, information collections, that were promulgated or issued since Sept. 1, 2016 to ensure that these are consistent with the policy objectives of the new administration.
  • Ensure that the EPA does not issue any Proposed Determination on whether the Model Year 2022-2025 Greenhouse Gas Light Duty Vehicle standards are appropriate under section 202(a) of the Clean Air Act.
  • Establish a New Office of Management and Budget (OMB) Requirement for “Whole Car Cost Analysis.” To ensure that the overall health and vitality of the auto sector is not jeopardized by the cumulative costs of new vehicle regulations/policies, agency proposals for new car requirements should be accompanied by a Whole Car Cost Impact Statement that aggregates compliance expenses.
  • Impose a “Shot Clock” for Agency Responses to Industry Submissions/Petitions. To encourage prompt responses to requests for regulatory actions, and prevent federal agencies and departments from sitting on such waivers and petitions that may help spur additional innovation, the timelines established in statute must be made meaningful and binding.
  • Revise OMB Guidance for Federal Agencies and Departments. OMB ought to establish clear thresholds regarding the use of non-regulatory guidance to ensure that quasi-regulatory efforts do not circumvent the traditional rulemaking process.
  • Establish a Presidential Advisory Committee to Coordinate Auto Sector Regulators. Such an advisory committee would help reduce regulatory friction and confusion among federal agencies and departments and could potentially result in recommendations for a new paradigm for vehicle regulation. The committee also could identify opportunities to streamline and improve the efficiency of multiple federal and state agencies by eliminating duplication of effort and more efficiently allocating responsibilities by agency area of expertise.
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