Lawsuits Pile Up On EPA Corporate Average Fuel Economy Standards (CAFE) Final Rule

The Alliance for Automotive Innovation, a group representing several automakers including GM, Ford, Honda, Toyota and Hyundai, announced it plans to intervene in a lawsuit by a group challenging the Trump Administration’s new final rule on vehicle emissions standards.

The libertarian think tank that filed the lawsuit, the Competitive Enterprise Institute, has argued that the new rule is too stringent.

Conversely, the Alliance for Automotive Innovation has defended the rule, saying that the rule gives the auto industry a “return on its investment in advanced emissions-reduction and fuel economy technologies,” while also providing health and environmental benefits.

At the same time, however, the Alliance for Automotive Innovation, is preparing to defend the rule from states and environmental groups who say the rule does not do enough to reduce vehicle emissions and provide better health benefits.

Recently, 23 states and the District of Columbia, led by California, filed a lawsuit to prevent the final rule from taking effect. The states claim that the rule violates the Clean Air Act and other environmental laws and that the federal government should revert to the Obama-era standards.

In a statement, California Attorney General Xavier Becerra claimed that the new rule would lead to job losses and put the health of Americans in danger. Joining California and the District of Columbia were Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, Washington and Wisconsin.

The EPA and the National Highway Traffic Safety Administration (NHTSA) issued the final rule in April that makes significant reductions in federal mileage standards for cars, pick-up trucks, and SUVs.

The Safer Affordable Fuel Efficient Vehicles (SAFE) rule is important to petroleum marketers because federal fuel efficiency standards have a direct impact on consumer demand for transportation fuels.

Under the final rule, automakers are required to improve average fuel efficiency by only 1.5 percent per year between model years 2021 and 2026, far below the 5 percent annual improvement rate required over the same period under current efficiency standards.

The 1.5 percent improvement requirement matches auto manufacturers historic efficiency rate achieved by voluntary technological advancements.

The lower improvement rate translates into an average fleetwide mileage standard of 40.4 mpg as opposed to 46.7 mpg under the 5 percent rate.

PMAA submitted numerous arguments as to why current MPG standards could harm petroleum marketers and how important it is that the Trump Administration’s rule be adopted.

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