EPA Finalizes Rollback of Obama-Era Vehicle Emission Standards

Historic Deregulatory Action Finalized

The U.S. Environmental Protection Agency (EPA) and the National Highway Traffic Safety Administration (NHTSA) finalized the Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule on March 30, 2020. This action, announced alongside President Donald Trump, represented a significant rollback of Obama-era greenhouse gas (GHG) emission and fuel economy standards for passenger cars and light trucks.

Changes to Emission and Fuel Economy Standards

The SAFE Vehicles Rule significantly altered the Corporate Average Fuel Economy (CAFE) and carbon dioxide (CO2) emission standards for model years 2021 through 2026. Under the previous 2012 Obama-era regulations, automakers were required to achieve a 5% annual increase in fuel efficiency, aiming for an average of 54.5 miles per gallon by 2025. The new SAFE Rule reduced this requirement to a 1.5% annual increase in stringency for both CAFE and CO2 standards.

Administration's Rationale and Projected Benefits

The Trump administration justified the rollback by arguing that the Obama-era standards were too stringent and imposed excessive costs on consumers and the automotive industry. Then-EPA Administrator Andrew Wheeler stated that the final rule 'puts in place a sensible one national program that strikes the right regulatory balance that protects our environment, and sets reasonable targets for the auto industry.' The administration projected that the new standards would reduce the average price of a new vehicle by approximately $1,000 and save Americans roughly $2,400 on vehicles produced in the future. Proponents also claimed the rule would lead to approximately 3,300 fewer traffic fatalities and 397,000 fewer injuries by making newer, safer vehicles more affordable and accelerating fleet turnover.

Environmental Concerns and Industry Division

The decision drew strong criticism from environmental organizations and several states, who warned of increased greenhouse gas emissions and negative impacts on public health. The EPA's own analysis indicated that the SAFE Rule would result in an increase of 874 million metric tons of CO2 emissions. Environmental groups accused the administration of using the 'cover' of the coronavirus pandemic to enact the change. The auto industry itself was divided on the issue, with some major manufacturers like Ford, BMW, Honda, and Volkswagen siding with California in agreeing to higher standards, while others contended the Obama-era standards were difficult to meet due to consumer shifts towards SUVs and trucks.