Are EPA’s New Emissions Targets Safe From Politics?

In an effort to drive sales of battery-electric vehicles, the EPA has issued proposed revisions to current emissions standards for cars and trucks. Experts say if adopted, the new standards could boost sales of BEVs and hydrogen-powered trucks tenfold in 10 years: electric vehicles would be projected to comprise 55% of new 2029-model-year sales, 60% of 2030 model year, and 67% by 2032.

The EPA rules are viewed as possible only because of the federal government’s $80 billion investment and commitment to various incentives and subsidies in the Inflation Reduction Act signed last August. But now, Congressional Republicans are using the debt-ceiling debate to try and gut the alternative-energy programs in the bill.

The proposed EPA rules would change current “targets” set by the Biden White House into mandates, with violations punishable with fines. The overarching goal is not just cleaner cars, but also the transformation of the auto industry: The EPA would impose regulatory penalties on companies that do not move quickly enough toward electric cars while rewarding those that do with consumer tax credits that subsidize EV sales.

The proposed rules would greatly expand current emission standards that are set to expire in 2026 – targets that did not take into account emerging technology that barely existed when those standards were set.

“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,” EPA Administrator Michael Regan says in a statement.

The 2023-2026 model-year emissions standards will increase between 5%-10% each year, to an average 40 mpg (5.9 L/100 km)  on a 2026- model-year vehicle’s emissions sticker – what consumers see on a new car. The new 40 mpg standard is a slight increase from the 38.2 mpg (6.15 L/100 km) for 2026 vehicles that the EPA first proposed last August.

The lower Trump-era emissions standards were a rollback of Obama Admin. rules and would have increased to just 32 mpg (7.3 L/100 km) in model-year 2026. The new standards are also an increase from the Obama EPA’s standard of 36 mpg (6.5 L/100 km).

Biden in Lyriq NAIAS September 22

The Debt Ceiling Negotiation Looms

The EPA rule proposal would not be directly impacted by current demands by House Republicans who are trying to roll back alternative-energy subsidies and targets in the Inflation Reduction Act, which allocated $80 billion for various climate-change initiatives. But House Republicans are holding the debt ceiling increase hostage to try to undo some of Biden’s legislative accomplishments when the Democrats still controlled the House, and before the 2024 election.

Removing $80 billion in government investment in battery-charging infrastructure, hydrogen hubs, tax credits for BEVs and manufacturing incentives for BEVs and batteries would do worse than throw gravel into the gears of the push for alternative-energy vehicles. Too much of an investment rollback would make the EPA target nearly impossible to hit.

The EPA is not mandating the level of electric-vehicle sales. Instead, it’s proposing to require that automakers limit the greenhouse gas emissions coming from their entire fleets – which could be done by making more of their vehicles electric or by upgrading the gasoline-powered engines in their cars and adding more hybrids and plug-in hybrids, as well as hydrogen-powered vehicles.

Since the IRA was passed, auto and battery makers have already announced several manufacturing investments that meet the criteria for government subsidies and investments and would most certainly cause most projects to be off-shored.  Tesla, Honda, General Motors, Ford, Stellantis, Toyota and Volkswagen Group are among the heavy hitters bringing billions to bear on new EV manufacturing in the U.S., specifically citing the IRA as changing the criteria for locating new plants. Ironically, the majority of those investments are being made in red states represented in Congress by members pushing to repeal the IRA.

The auto and truck industry has been aggressive in investing and bringing to market BEVs. Total sales of BEVs are expected to reach 7% to 8% of new light-vehicle sales this year. But automakers have also been warning regulators and policy makers of supply chain and infrastructure issues that will be speed bumps to reaching overly aggressive targets.

Clean-air and environmental advocates have applauded the EPA move. 

“This announcement shows that EPA is taking seriously its responsibility to advance cleaner technologies and fight climate change,” says Dave Cooke, senior vehicle analyst at the Union of Concerned Scientists. “Transportation is the largest contributor to global warming emissions in the U.S….We can’t meet our climate goals without continuing to cut vehicle pollution, including by ensuring that 100% of new-vehicle sales are electric by 2035.”

A trade group representing automakers questions whether the new proposed standards can be met, however.

“Are EPA’s new standards feasible? Will they accelerate the EV transformation? It depends,” John Bozzella, president and CEO of the Alliance for Automotive Innovation, says in a blog post. “Factors outside the vehicle, like charging infrastructure, supply chains, grid resiliency (and) the availability of low-carbon fuels and critical minerals will determine whether EPA standards at these levels are achievable.”