EPA’s Tailpipe Emission Standard Expected to Promote EV’s at the Expense of Cleaner Fuels

On March 20, the EPA finalized stringent new greenhouse gas (GHG) emission standards for light-duty cars and trucks. The final rule is predicted to significantly increase the domestic market share for electric vehicles (EVs) over the 2027-2032 phase-in period. By 2032, the rule calls for automakers to meet a fleetwide average emissions rate of 85 grams per mile, down from 192 grams for current model year 2024 vehicles. In other words, the final rule aims for a 50 percent EV sales target by 2030 compared to the 67 percent EV sales target by 2032 from the proposed rule. While the final rule does not mandate any particular technology to meet the new tailpipe emission standard, auto manufacturers are expected to comply by significantly ramping up the manufacture of EVs. The EPA estimates the final rule will increase EV market share to 55 percent of all new cars sold nationwide by 2032 while electric plug-in hybrid vehicle sales will increase to 13 percent over the same period, according to the agency. By contrast, in 2023 EVs made up just 7 percent of vehicle sales and plug-in hybrids another 2 percent. Automakers were able to convince the EPA to relax annual GHG reduction goals during the early part of the phase-in period to give them more time to retrofit for EV manufacturing. The new GHG standards for light duty cars and trucks comes just one year after the EPA proposed GHG tailpipe emission reductions for heavy-duty trucks through model year 2032. Under the proposed rule, the EPA projected 50 percent of heavy-duty vehicles, 35 percent of short-haul trucks and 25 percent of long-haul trucks would be electric by 2032. The heavy-duty truck rule is expected out this Spring.

Congressional Republicans seeking to overturn the rule are already sharpening their strategy. Sens. Pete Ricketts of Nebraska and Dan Sullivan of Alaska said Wednesday that they plan to introduce legislation to overturn the regulation. In addition, lawsuits by the major refiners and some environmental groups may slow down implementation of the stringent new GHG standards.

Earlier this year, EMA’s 48 state and regional trade associations, along with the American Farm Bureau, American Fuel & Petrochemical Manufacturers, API, Clean Fuels Alliance America, Growth Energy, National Corn Growers Association, NACS, NATSO, Renewable Fuels Association, SIGMA, U.S. Chamber of Commerce and several other organizations urged the Biden Administration to reconsider its GHG standards proposed rule for light and medium-duty vehicles for model years 2027 and later. Unfortunately, the focus on EV production will fundamentally eliminate an opportunity to provide clean green liquid fuels such as renewable diesel, biodiesel, renewable gasoline, clean hydrogen and ethanol that immediately lower emissions not only for new vehicles, but for the vehicles currently on the road. In addition, the rule will limit consumer choice on cleaner internal combustion engines and threaten the viability and jobs of small business energy marketers around the country. CLICK HERE to read the letter.

Even though automakers are committed to boosting EVs, many of them, as well as members on Capitol Hill, are raising questions about the Biden Administration’s new approach, from securing critical materials needed for EV batteries, to the availability of EV charging stations and the ability of electric grids to meet power needs. China’s stranglehold on the critical minerals industry and mining in Africa is a major concern.

“Unfortunately, President Biden’s aggressive attempt to electrify the transportation sector will limit consumer choice on cleaner greener ICEs, increase Americans’ utility bills to subsidize a massive expansion of the electric grid for EV charging and threaten the viability and jobs of small business energy marketers around the country, whether they deliver gasoline and diesel or renewable fuels like ethanol, biodiesel and renewable diesel,” said EMA President Rob Underwood.

Legal Challenges Playing Out

EMA is part of business groups and States who have already asked the courts to review EPA’s prior tailpipe emissions standards for model year 2025 and 2026 vehicles and the Agency’s reinstatement of California’s Clean Air Act waiver to issue climate-based vehicle emissions standards. Whether California can blaze its own trail on combatting climate change also implicates the “major questions doctrine,” which holds that courts should not defer to agencies on questions of “vast economic or political significance” unless Congress has provided explicit authority to the agencies. The appeals court will be asked to decide whether Congress authorized California in the Clean Air Act to regulate vehicle emissions to target a phenomenon like climate change which has a global cause and effect.

Additionally, EMA joined as amicus curiae challenge to the National Highway Traffic Safety Administration’s fuel-economy standards. EMA also endorsed the American Fuel & Petrochemical Manufacturer’s (AFPM) comments regarding EPA’s GHG standards for light-duty and medium-duty vehicles for model years 2027 and later. EMA urged the EPA to consider lifecycle emissions and a technology neutral approach when it comes to promoting policies to reduce emissions. Click here to read EMA’s comments.