Released April 13, 2023 | SUGAR LAND
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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--President Joe Biden is making an expensive bet--potentially worth hundreds of billion dollars per year--that economists are correct when they say that once the government creates and guarantees a market, companies will find a way to produce the goods and services demanded by that market.
On April 12, the U.S. Environmental Protection Agency (EPA) (Washington, D.C.) released two new proposals for vehicle tailpipe emissions standards that would require up to 67% of new vehicles sold in the U.S. to be powered by electricity, a nearly tenfold increase over current electric vehicle sales.
The agency proposed two sets of proposed rules that would sharply lower allowable tailpipe emissions standards for four classes of vehicles: cars, light-duty trucks, medium duty trucks and heavy-duty trucks build during or after model year 2027. The first set applies to cars, light-duty trucks and medium-duty trucks. The second proposal applied to heavy-duty trucks.
If finalized as drafted, the rules likely will increase the costs of manufacturing vehicles using internal combustion engines (IECs) in order to accelerate the transition to vehicles powered by electricity--presumably electricity generated from no- or low-emission resources.
The transportation section is the largest single sectoral emitter of carbon dioxide, a greenhouse gas (GHG). That sector emits about 27.2% of all GHGs in the U.S. Despite hefty federal, and in some cases state, incentives for new electric vehicle (EV) buyers, EVs accounted for only about 7.2% of all vehicles sold during the January-March 2023 period.
Public comments on the draft proposals will be taken for 60 days after the proposals are published in the Federal Register. A final rule is expected next year, though litigation is expected, which could delay or torpedo the implementation of the rules.
The first proposed rule, covering cars, light-duty trucks and medium-duty trucks, would include stringent emissions standards such as oxides of nitrogen (NOx), particulate matter (PM) and volatile organic compounds (VOCs), more stringent emissions standards for GHGs, changes to certain optional credit programs, durability provisions for light-duty electrified vehicle batteries and warranty provisions for both electrified vehicles and diesel engine-equipped vehicles, and various improvements to several elements of the existing light-duty program that will also apply to the proposed program.
Specifically, EPA's proposal for cars and light-duty trucks would require annual CO2 emissions reductions over a six-year period, from model years 2027-2032. The draft rule is expected to lower CO2 emissions by 56% over six years, to 82 grams/mile (g/mile) of CO2 on an industry-wide basis by model year 2032.
Regarding criteria pollutants, the agency is proposing more stringent emissions standards for cars, light-duty trucks and medium-duty trucks for model years 2027-2032. For light-duty vehicles, EPA is proposing to reduce by 60% emissions of nonmethane organic gases (NMOG) plus nitrogen oxides (NOX), to a fleet-level average of 12 mg/mi by model year 2032, down from the current standard of 30 mg/mi standards for model year 2025.
For medium-duty vehicles, EPA proposes to slash by between 66% and 76% the allowable NMOG+NOX standards to a fleet average of level of 60 mg/mi by model year 2032.
For cars, light-duty trucks and heavy-duty trucks, EPA is proposing a particulate matter (PM) standard of 0.5 mg/mi, which would represent a 95% reduction from existing regulation of ICE vehicles. In addition to reducing PM emissions, the proposed standards would reduce emissions of mobile source air toxics.
The first emissions proposal for cars, light-duty and heavy-duty trucks, runs over 700 pages. The second proposal EPA released April 12, also exceeding 700 pages, was for heavy-duty trucks.
In releasing the two proposals, the EPA said, "Together, these proposals would avoid nearly 10 billion tons of CO2 emissions, equivalent to more than twice the total U.S. CO2 emissions in 2022, while saving thousands of dollars over the lives of the vehicles meeting these new standards and reduce America's reliance on approximately 20 billion barrels of oil imports."
The agency estimates that the benefits of the proposed standards would exceed costs by at least $1 trillion. By electrifying U.S. vehicle travel, the average consumer would save the $12,000 over the lifetime of a light-duty vehicle, as compared to a vehicle that was not subject to the new standards.
EPA Administrator Michael Regan said: "By proposing the most ambitious pollution standards ever for cars and trucks, we are delivering on the Biden-Harris Administration's promise to protect people and the planet, securing critical reductions in dangerous air and climate pollution and ensuring significant economic benefits like lower fuel and maintenance costs for families. These ambitious standards are readily achievable thanks to President Biden's Investing in America agenda, which is already driving historic progress to build more American-made electric cars and secure America's global competitiveness."
The agency said that since Biden took office, the number of EV sales has tripled while the number of available models has doubled. There are over 130,000 public chargers across the country--a 40% increase over 2020. The private sector has also committed more than $120 billion in domestic EV and battery investments since President Biden signed the Inflation Reduction Act into law. The new standards proposed today reflect the advancements and investments in clean vehicle manufacturing, which have been accelerated by President Biden's Investing in America agenda and complement the ongoing transition in the market towards cleaner vehicles."
Prior Biden administration legislative achievements, including the Infrastructure Investment and Jobs Act (2001) and the Inflation Reduction Act (2022) contained hefty amounts of funding to build a national electric vehicle charging network, provide incentives to EV buyers providing the vehicles met certain criteria, and a total of $369 billion to support renewable energy.
As a candidate and a president, Biden pledged to dramatically cut U.S. greenhouse gas emissions from the Power and transportation sectors. Numerous experts in the Mining and transportation sectors, have raised questions about the supply-chain infrastructure that must be scaled up at lightning speed in order to provide the U.S. with the capabilities to mine critical minerals for EVs, refine it, and manufacture the requisite number of batteries that an electric-dominant transportation sector will require. For more on that, see April 3, 2023, article - Lithium Expert Calls for More Mines to Meet Expected Surge in EV Demand.
Reaction split along predictable lines: The oil industry, free-market advocates and Republicans on Capitol Hill and elsewhere criticized the draft rule. Democrats and environmental groups supported it, though some criticized the proposals for not going far enough fast enough.
Mike Sommers, president and chief executive at the American Petroleum Institute (API) (Washington, D.C.), the oil and gas industry's largest lobbying group, said, "This deeply flawed proposal is a major step toward a ban on the vehicles Americans rely on. As proposed, this rule will hurt consumers with higher costs and greater reliance on unstable foreign supply chains."
The oil and gas industry tends to have a conservative outlook. The group was highly supportive of then-President Donald Trump's oil and gas moves but critical of steps being taken by the Biden administration. However, some API members, including BP Plc (NYSE:BP) (London, England) and Shell plc (NYSE:SHEL) (London, England), are generally supportive of the Biden administration's decarbonization ambitions.
John Bozzella, chief executive of the Alliance for Automotive Innovation (Washington, D.C.), a trade group representing Ford, General Motors and other automakers, called the EPA proposal "aggressive by any measure" and wrote in a statement that it exceeds the Biden administration's 50% electric vehicle sales target for 2030 announced less than two years ago.
In a statement, Senator Shelley Moore Capito (R., W. Va.), ranking member of the Senate Environment and Public Works Committee, said , "The Biden administration made clear it wants to decide for Americans what kinds of cars and trucks we are allowed to buy, lease, and drive," blasting the "misguided emissions standards" that were made without considering supply-chain challenges, a lack of electric-vehicle charging infrastructure and the challenge of receiving permits to mine the minerals needed for EVs.
However, Luke Tonachel, senior director of the clean vehicles and buildings program at the Natural Resources Defense Council (NRDC) (New York, New York), supported the proposed rules. "The EPA standards are a huge step forward in addressing the largest source of climate pollution: transportation. If the strongest standards are finalized, it will but the U.S. on a path to end pollution from vehicle tailpipes and that's essential to meeting both our climate and our public health goals."
"The draft rule fails to require any improvement in the tens of millions of new gas guzzlers," said Dan Becker, director of the Safe Climate Transport Campaign at the Center for Biological Diversity (Tucson, Arizona). The rule falls short of "pollution cut necessary to protect our planet."
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
On April 12, the U.S. Environmental Protection Agency (EPA) (Washington, D.C.) released two new proposals for vehicle tailpipe emissions standards that would require up to 67% of new vehicles sold in the U.S. to be powered by electricity, a nearly tenfold increase over current electric vehicle sales.
The agency proposed two sets of proposed rules that would sharply lower allowable tailpipe emissions standards for four classes of vehicles: cars, light-duty trucks, medium duty trucks and heavy-duty trucks build during or after model year 2027. The first set applies to cars, light-duty trucks and medium-duty trucks. The second proposal applied to heavy-duty trucks.
If finalized as drafted, the rules likely will increase the costs of manufacturing vehicles using internal combustion engines (IECs) in order to accelerate the transition to vehicles powered by electricity--presumably electricity generated from no- or low-emission resources.
The transportation section is the largest single sectoral emitter of carbon dioxide, a greenhouse gas (GHG). That sector emits about 27.2% of all GHGs in the U.S. Despite hefty federal, and in some cases state, incentives for new electric vehicle (EV) buyers, EVs accounted for only about 7.2% of all vehicles sold during the January-March 2023 period.
Public comments on the draft proposals will be taken for 60 days after the proposals are published in the Federal Register. A final rule is expected next year, though litigation is expected, which could delay or torpedo the implementation of the rules.
The first proposed rule, covering cars, light-duty trucks and medium-duty trucks, would include stringent emissions standards such as oxides of nitrogen (NOx), particulate matter (PM) and volatile organic compounds (VOCs), more stringent emissions standards for GHGs, changes to certain optional credit programs, durability provisions for light-duty electrified vehicle batteries and warranty provisions for both electrified vehicles and diesel engine-equipped vehicles, and various improvements to several elements of the existing light-duty program that will also apply to the proposed program.
Specifically, EPA's proposal for cars and light-duty trucks would require annual CO2 emissions reductions over a six-year period, from model years 2027-2032. The draft rule is expected to lower CO2 emissions by 56% over six years, to 82 grams/mile (g/mile) of CO2 on an industry-wide basis by model year 2032.
Regarding criteria pollutants, the agency is proposing more stringent emissions standards for cars, light-duty trucks and medium-duty trucks for model years 2027-2032. For light-duty vehicles, EPA is proposing to reduce by 60% emissions of nonmethane organic gases (NMOG) plus nitrogen oxides (NOX), to a fleet-level average of 12 mg/mi by model year 2032, down from the current standard of 30 mg/mi standards for model year 2025.
For medium-duty vehicles, EPA proposes to slash by between 66% and 76% the allowable NMOG+NOX standards to a fleet average of level of 60 mg/mi by model year 2032.
For cars, light-duty trucks and heavy-duty trucks, EPA is proposing a particulate matter (PM) standard of 0.5 mg/mi, which would represent a 95% reduction from existing regulation of ICE vehicles. In addition to reducing PM emissions, the proposed standards would reduce emissions of mobile source air toxics.
The first emissions proposal for cars, light-duty and heavy-duty trucks, runs over 700 pages. The second proposal EPA released April 12, also exceeding 700 pages, was for heavy-duty trucks.
In releasing the two proposals, the EPA said, "Together, these proposals would avoid nearly 10 billion tons of CO2 emissions, equivalent to more than twice the total U.S. CO2 emissions in 2022, while saving thousands of dollars over the lives of the vehicles meeting these new standards and reduce America's reliance on approximately 20 billion barrels of oil imports."
The agency estimates that the benefits of the proposed standards would exceed costs by at least $1 trillion. By electrifying U.S. vehicle travel, the average consumer would save the $12,000 over the lifetime of a light-duty vehicle, as compared to a vehicle that was not subject to the new standards.
EPA Administrator Michael Regan said: "By proposing the most ambitious pollution standards ever for cars and trucks, we are delivering on the Biden-Harris Administration's promise to protect people and the planet, securing critical reductions in dangerous air and climate pollution and ensuring significant economic benefits like lower fuel and maintenance costs for families. These ambitious standards are readily achievable thanks to President Biden's Investing in America agenda, which is already driving historic progress to build more American-made electric cars and secure America's global competitiveness."
The agency said that since Biden took office, the number of EV sales has tripled while the number of available models has doubled. There are over 130,000 public chargers across the country--a 40% increase over 2020. The private sector has also committed more than $120 billion in domestic EV and battery investments since President Biden signed the Inflation Reduction Act into law. The new standards proposed today reflect the advancements and investments in clean vehicle manufacturing, which have been accelerated by President Biden's Investing in America agenda and complement the ongoing transition in the market towards cleaner vehicles."
Prior Biden administration legislative achievements, including the Infrastructure Investment and Jobs Act (2001) and the Inflation Reduction Act (2022) contained hefty amounts of funding to build a national electric vehicle charging network, provide incentives to EV buyers providing the vehicles met certain criteria, and a total of $369 billion to support renewable energy.
As a candidate and a president, Biden pledged to dramatically cut U.S. greenhouse gas emissions from the Power and transportation sectors. Numerous experts in the Mining and transportation sectors, have raised questions about the supply-chain infrastructure that must be scaled up at lightning speed in order to provide the U.S. with the capabilities to mine critical minerals for EVs, refine it, and manufacture the requisite number of batteries that an electric-dominant transportation sector will require. For more on that, see April 3, 2023, article - Lithium Expert Calls for More Mines to Meet Expected Surge in EV Demand.
Reaction split along predictable lines: The oil industry, free-market advocates and Republicans on Capitol Hill and elsewhere criticized the draft rule. Democrats and environmental groups supported it, though some criticized the proposals for not going far enough fast enough.
Mike Sommers, president and chief executive at the American Petroleum Institute (API) (Washington, D.C.), the oil and gas industry's largest lobbying group, said, "This deeply flawed proposal is a major step toward a ban on the vehicles Americans rely on. As proposed, this rule will hurt consumers with higher costs and greater reliance on unstable foreign supply chains."
The oil and gas industry tends to have a conservative outlook. The group was highly supportive of then-President Donald Trump's oil and gas moves but critical of steps being taken by the Biden administration. However, some API members, including BP Plc (NYSE:BP) (London, England) and Shell plc (NYSE:SHEL) (London, England), are generally supportive of the Biden administration's decarbonization ambitions.
John Bozzella, chief executive of the Alliance for Automotive Innovation (Washington, D.C.), a trade group representing Ford, General Motors and other automakers, called the EPA proposal "aggressive by any measure" and wrote in a statement that it exceeds the Biden administration's 50% electric vehicle sales target for 2030 announced less than two years ago.
In a statement, Senator Shelley Moore Capito (R., W. Va.), ranking member of the Senate Environment and Public Works Committee, said , "The Biden administration made clear it wants to decide for Americans what kinds of cars and trucks we are allowed to buy, lease, and drive," blasting the "misguided emissions standards" that were made without considering supply-chain challenges, a lack of electric-vehicle charging infrastructure and the challenge of receiving permits to mine the minerals needed for EVs.
However, Luke Tonachel, senior director of the clean vehicles and buildings program at the Natural Resources Defense Council (NRDC) (New York, New York), supported the proposed rules. "The EPA standards are a huge step forward in addressing the largest source of climate pollution: transportation. If the strongest standards are finalized, it will but the U.S. on a path to end pollution from vehicle tailpipes and that's essential to meeting both our climate and our public health goals."
"The draft rule fails to require any improvement in the tens of millions of new gas guzzlers," said Dan Becker, director of the Safe Climate Transport Campaign at the Center for Biological Diversity (Tucson, Arizona). The rule falls short of "pollution cut necessary to protect our planet."
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
