Released March 22, 2024 | SUGAR LAND
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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--The Biden administration bowed to market and electoral realities Wednesday when it finalized a rule loosening vehicle tailpipe emissions standards for new vehicles built after 2027. The new rules give automakers more time to phase in non-emitting and low-emitting vehicles compared to a draft rule that the U.S. Environmental Protection Agency (EPA) issued about 11 months ago.
Republicans and some industry groups said the administration did not bow deeply enough. Some environmental groups said the bow was just right, but others said it was too deep.
The final rule is designed to ensure that the majority of new passenger cars and light trucks sold in the United States are all-electric or hybrids by 2032. An earlier Biden administration goal was for 50% of all new vehicles sold in 2030 would have no emissions.
In announcing the final rule, the EPA said the new emissions standards will prevent about 7.2 billion tons of carbon emissions by 2055. It also lowered allowable emissions of other pollutants. The final rule would provide nearly $100 billion of annual net benefits to society, the agency estimated, including $13 billion of annual public health benefits due to improved air quality, and $62 billion in reduced annual fuel costs and vehicle maintenance and repair costs.
Although something of a retreat from last year's draft rule, the agency nonetheless said it represented the strongest-ever tailpipe emission standards for light-duty trucks and medium-duty vehicles while also preserving customer choice.
In a statement announcing the final rules, EPA Administrator Michael Regan said, "With transportation as the largest source of U.S. climate emissions, these strongest-ever pollution standards for cars solidify America's leadership in building a clean transportation future and creating good-paying American jobs, all while advancing President Biden's historic climate agenda. ... Under President Biden's leadership, this administration is pairing strong standards with historic investments to revitalize domestic manufacturing, strengthen domestic supply chains and create good-paying jobs."
Through 2055, the EPA estimated the new tailpipe emissions standards would reduce carbon dioxide (CO2) emissions about 7.2 billion tons. Emissions of particulate matter would be cut by 8,700 tons, emissions of oxides of nitrogen (NOx) would decline 36,000 tons and volatile organic compounds (VOCs) emissions would be slashed by 150,000 tons.
In addition to lessening CO2 emissions, which contribute to global warming, the new standards would significantly improve air quality, creating a variety of health benefits in the form of fewer deaths, less hospital visits for those with respiratory ailments and reduced absences at work and school. The agency estimated that the air pollution reductions from these standards will provide $13 billion in annual health benefits.
The standards will phase in gradually over model years (MYs) 2027 through 2032.
The final emissions standards are one of several initiatives being pushed by the Biden administration to fulfill his goal of fighting global temperature gain by cutting U.S. greenhouse emissions in half by 2030 and eliminating them by 2050. Those other initiatives include lowering CO2 emissions from power plants and methane leaks from oil and gas wells. Wednesday's final rule follows the 2022 Inflation Reduction Act, the biggest climate law in the nation's history, which is providing at least $370 billion in federal incentives to support clean energy, including tax credits to buyers of electric vehicles (EVs).
The final rule came as sales of EVs significantly underperformed expectations last year. Even though a record of 1.2 million EVs were sold during 2023, roughly 7.6% of all new vehicles sold, that sum was well under more optimistic projections from recent years.
As that shortfall in EV sales was becoming apparent, automakers last year scaled back planned capital spending to build new EV manufacturing facilities. For more on that, see November 13, 2023, article - Automakers Slow EV Spending as Demand Lags Projections.
On a blended fleetwide average for light-duty vehicles, the EPA's final rule would lower vehicle CO2 emissions nearly 50% for vehicles made in model year 2032 compared to vehicles manufactured in model year 2026, the agency estimated in releasing the final rule Wednesday.
Vehicle makers can meet the new standards by shifting their production of high-, low- and non-emitting vehicles. The rule does not ban any type of vehicle. But its consequences, if upheld, would bring dramatic changes to the auto industry, its suppliers and consumers.
For light-duty vehicles, the final emissions standards would limit total emissions to 170 grams of CO2 per mile traveled for model year 2027 vehicles, declining to 119 grams per mile in 2030 and 85 grams per mile in 2032. This category of vehicles is a blended average for passenger cars, light-duty trucks and heavier vehicles designed primarily for the transportation of people.
For medium-duty vehicles, a category that includes vehicles with a gross vehicle weight rating between 8,501 to 14,000 pounds, the final rule lowered fleetwide blended average CO2 emissions to 392 grams of CO2 emitted per mile of transport for model year 2027 vehicles, falling to 353 grams per mile in model year 2030 vehicles and then to 274 grams per mile in model year 2032 vehicles. The "medium-duty" category includes vans and pickup trucks.
The new rules give automakers more time to lower the average emissions of their fleet. For more on the EPA's original draft rule, see April 13, 2023, article - Biden EPA Seeks to Boost EV Sales by Tightening Vehicle Tailpipe Emission Standards.
David Pickering, Industrial Info Resources' vice president of research for the Industrial Manufacturing segment, said the final rule was "a distinction without a significant difference" compared to the original draft rule. "EVs still are too expensive for most Americans, the charging network is still in the early stages of being built, and automakers are scaling down their capital outlays so they don't build too many EVs before consumer demand and the supporting infrastructure is in place."
The rule will be litigated, he predicted, adding that if it gets to the U.S. Supreme Court, the court's current 6-3 conservative super-majority is likely to rule against the administration.
Biden's Republican presidential opponent, Donald Trump, has long blasted EVs and Biden's attempt to transform the market to non-emitting vehicles. He issued sharply critical statements after the EPA released its finalized rules Wednesday.
The final rule also was harshly criticized by the leaders of oil and gas and refining trade groups. In a joint statement, Mike Sommers, president and chief executive of the American Petroleum Institute (API), and Chet Thompson, president and chief executive of the American Fuel & Petrochemical Manufacturers (AFPM), said: "At a time when millions of Americans are struggling with high costs and inflation, the Biden administration has finalized a regulation that will unequivocally eliminate most new gas cars and traditional hybrids from the U.S. market in less than a decade."
"As much as the President and EPA claim to have 'eased' their approach," they continued, "nothing could be further from the truth. This regulation will make new gas-powered vehicles unavailable or prohibitively expensive for most Americans. For them, this wildly unpopular policy is going to feel and function like a ban."
The two trade groups vowed to challenge the final rule in court. Republican attorneys general said they, too, would fight the final rules in court.
In an article, The New York Times quoted Elizabeth Murrill, the attorney general of Louisiana, a major oil and gas producing state: "They may wish for us all to drive E.V.s or no cars at all, but at the end of the day that's not their decision. There is a limit to their authority to remake society in their own vision and the (U.S. Supreme Court) has realized that."
Automakers had a slightly more upbeat view of the EPA final rule. In a statement, John Bozzella, president of the Alliance for Automotive Innovation, which represents 42 car companies that produce nearly all the new vehicles sold in the U.S., said the new rule was "a stretch goal" but one that offered some flexibility. "The future is electric," he said. Still, the rules "are mindful of the importance of choice to drivers and preserve their ability to choose the vehicle that's right for them."
The United Auto Workers (UAW), which recently endorsed Biden's re-election and committed to spending on his behalf, said in a statement, that the environmental agency had "come a long way to create a more feasible emissions rule" that would protect workers who build gas-powered cars while creating a path for car makers to "implement the full range of automotive technologies to reduce emissions."
Environmental groups were split on the new rule, with some praising it warmly as others slammed it as a sellout. The transportation sector is the largest emitter of CO2.
In a statement, Amanda Leland, executive director of the Environmental Defense Fund, welcomed the final rule. "This is a day to celebrate American achievement. The step EPA is taking today will slash climate pollution and air pollution. It will bring more jobs for workers, more choices and more savings for consumers, and a healthier future for our children. The U.S. has leapt forward in the global race to invest in clean vehicles, with $188 billion and nearly 200,000 jobs on the way. Jobs (are being created) in communities across the country, in places like Michigan, Nevada and Kentucky. These clean car standards will help supercharge economic expansion and make America stronger."
But Dan Becker, director of the Safe Climate Transport Council at the Center for Biological Diversity, didn't nearly see it that way: In a statement, he said, "EPA caved to pressure from Big Auto, Big Oil and car dealers and riddled the plan with loopholes big enough to drive a Ford F150 through." Gas-powered cars would "dominate sales through much of this decade, guzzling and polluting into the middle of the century," he added.
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) platform 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).
Republicans and some industry groups said the administration did not bow deeply enough. Some environmental groups said the bow was just right, but others said it was too deep.
The final rule is designed to ensure that the majority of new passenger cars and light trucks sold in the United States are all-electric or hybrids by 2032. An earlier Biden administration goal was for 50% of all new vehicles sold in 2030 would have no emissions.
In announcing the final rule, the EPA said the new emissions standards will prevent about 7.2 billion tons of carbon emissions by 2055. It also lowered allowable emissions of other pollutants. The final rule would provide nearly $100 billion of annual net benefits to society, the agency estimated, including $13 billion of annual public health benefits due to improved air quality, and $62 billion in reduced annual fuel costs and vehicle maintenance and repair costs.
Although something of a retreat from last year's draft rule, the agency nonetheless said it represented the strongest-ever tailpipe emission standards for light-duty trucks and medium-duty vehicles while also preserving customer choice.
In a statement announcing the final rules, EPA Administrator Michael Regan said, "With transportation as the largest source of U.S. climate emissions, these strongest-ever pollution standards for cars solidify America's leadership in building a clean transportation future and creating good-paying American jobs, all while advancing President Biden's historic climate agenda. ... Under President Biden's leadership, this administration is pairing strong standards with historic investments to revitalize domestic manufacturing, strengthen domestic supply chains and create good-paying jobs."
Through 2055, the EPA estimated the new tailpipe emissions standards would reduce carbon dioxide (CO2) emissions about 7.2 billion tons. Emissions of particulate matter would be cut by 8,700 tons, emissions of oxides of nitrogen (NOx) would decline 36,000 tons and volatile organic compounds (VOCs) emissions would be slashed by 150,000 tons.
In addition to lessening CO2 emissions, which contribute to global warming, the new standards would significantly improve air quality, creating a variety of health benefits in the form of fewer deaths, less hospital visits for those with respiratory ailments and reduced absences at work and school. The agency estimated that the air pollution reductions from these standards will provide $13 billion in annual health benefits.
The standards will phase in gradually over model years (MYs) 2027 through 2032.
The final emissions standards are one of several initiatives being pushed by the Biden administration to fulfill his goal of fighting global temperature gain by cutting U.S. greenhouse emissions in half by 2030 and eliminating them by 2050. Those other initiatives include lowering CO2 emissions from power plants and methane leaks from oil and gas wells. Wednesday's final rule follows the 2022 Inflation Reduction Act, the biggest climate law in the nation's history, which is providing at least $370 billion in federal incentives to support clean energy, including tax credits to buyers of electric vehicles (EVs).
The final rule came as sales of EVs significantly underperformed expectations last year. Even though a record of 1.2 million EVs were sold during 2023, roughly 7.6% of all new vehicles sold, that sum was well under more optimistic projections from recent years.
As that shortfall in EV sales was becoming apparent, automakers last year scaled back planned capital spending to build new EV manufacturing facilities. For more on that, see November 13, 2023, article - Automakers Slow EV Spending as Demand Lags Projections.
On a blended fleetwide average for light-duty vehicles, the EPA's final rule would lower vehicle CO2 emissions nearly 50% for vehicles made in model year 2032 compared to vehicles manufactured in model year 2026, the agency estimated in releasing the final rule Wednesday.
Vehicle makers can meet the new standards by shifting their production of high-, low- and non-emitting vehicles. The rule does not ban any type of vehicle. But its consequences, if upheld, would bring dramatic changes to the auto industry, its suppliers and consumers.
For light-duty vehicles, the final emissions standards would limit total emissions to 170 grams of CO2 per mile traveled for model year 2027 vehicles, declining to 119 grams per mile in 2030 and 85 grams per mile in 2032. This category of vehicles is a blended average for passenger cars, light-duty trucks and heavier vehicles designed primarily for the transportation of people.
For medium-duty vehicles, a category that includes vehicles with a gross vehicle weight rating between 8,501 to 14,000 pounds, the final rule lowered fleetwide blended average CO2 emissions to 392 grams of CO2 emitted per mile of transport for model year 2027 vehicles, falling to 353 grams per mile in model year 2030 vehicles and then to 274 grams per mile in model year 2032 vehicles. The "medium-duty" category includes vans and pickup trucks.
The new rules give automakers more time to lower the average emissions of their fleet. For more on the EPA's original draft rule, see April 13, 2023, article - Biden EPA Seeks to Boost EV Sales by Tightening Vehicle Tailpipe Emission Standards.
David Pickering, Industrial Info Resources' vice president of research for the Industrial Manufacturing segment, said the final rule was "a distinction without a significant difference" compared to the original draft rule. "EVs still are too expensive for most Americans, the charging network is still in the early stages of being built, and automakers are scaling down their capital outlays so they don't build too many EVs before consumer demand and the supporting infrastructure is in place."
The rule will be litigated, he predicted, adding that if it gets to the U.S. Supreme Court, the court's current 6-3 conservative super-majority is likely to rule against the administration.
Biden's Republican presidential opponent, Donald Trump, has long blasted EVs and Biden's attempt to transform the market to non-emitting vehicles. He issued sharply critical statements after the EPA released its finalized rules Wednesday.
The final rule also was harshly criticized by the leaders of oil and gas and refining trade groups. In a joint statement, Mike Sommers, president and chief executive of the American Petroleum Institute (API), and Chet Thompson, president and chief executive of the American Fuel & Petrochemical Manufacturers (AFPM), said: "At a time when millions of Americans are struggling with high costs and inflation, the Biden administration has finalized a regulation that will unequivocally eliminate most new gas cars and traditional hybrids from the U.S. market in less than a decade."
"As much as the President and EPA claim to have 'eased' their approach," they continued, "nothing could be further from the truth. This regulation will make new gas-powered vehicles unavailable or prohibitively expensive for most Americans. For them, this wildly unpopular policy is going to feel and function like a ban."
The two trade groups vowed to challenge the final rule in court. Republican attorneys general said they, too, would fight the final rules in court.
In an article, The New York Times quoted Elizabeth Murrill, the attorney general of Louisiana, a major oil and gas producing state: "They may wish for us all to drive E.V.s or no cars at all, but at the end of the day that's not their decision. There is a limit to their authority to remake society in their own vision and the (U.S. Supreme Court) has realized that."
Automakers had a slightly more upbeat view of the EPA final rule. In a statement, John Bozzella, president of the Alliance for Automotive Innovation, which represents 42 car companies that produce nearly all the new vehicles sold in the U.S., said the new rule was "a stretch goal" but one that offered some flexibility. "The future is electric," he said. Still, the rules "are mindful of the importance of choice to drivers and preserve their ability to choose the vehicle that's right for them."
The United Auto Workers (UAW), which recently endorsed Biden's re-election and committed to spending on his behalf, said in a statement, that the environmental agency had "come a long way to create a more feasible emissions rule" that would protect workers who build gas-powered cars while creating a path for car makers to "implement the full range of automotive technologies to reduce emissions."
Environmental groups were split on the new rule, with some praising it warmly as others slammed it as a sellout. The transportation sector is the largest emitter of CO2.
In a statement, Amanda Leland, executive director of the Environmental Defense Fund, welcomed the final rule. "This is a day to celebrate American achievement. The step EPA is taking today will slash climate pollution and air pollution. It will bring more jobs for workers, more choices and more savings for consumers, and a healthier future for our children. The U.S. has leapt forward in the global race to invest in clean vehicles, with $188 billion and nearly 200,000 jobs on the way. Jobs (are being created) in communities across the country, in places like Michigan, Nevada and Kentucky. These clean car standards will help supercharge economic expansion and make America stronger."
But Dan Becker, director of the Safe Climate Transport Council at the Center for Biological Diversity, didn't nearly see it that way: In a statement, he said, "EPA caved to pressure from Big Auto, Big Oil and car dealers and riddled the plan with loopholes big enough to drive a Ford F150 through." Gas-powered cars would "dominate sales through much of this decade, guzzling and polluting into the middle of the century," he added.
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) platform 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).
