Trump Plans to Rollback Obama Era Fuel Economy Standards

Trump administration is going to revoke California’s waiver under the Clean Air Act to set state requirements for vehicles. This is a precursor to Trump’s plan to roll back Obama era fuel economy standards set till 2025.

Actually, the Environmental Protection Agency (EPA) had proposed in August 2018 that a waiver granted to California in 2013 under the Clean Air Act be revoked. This thought coincides with news reported by major news agencies that in July this year, four automakers had reached a voluntary agreement with California to adopt state emissions standards.

The U.S. Justice Department is now investigating whether this decision violated antitrust law. The four automakers include bigwigs like Ford Motor Co, BMW AG,  Volkswagen AG, and Honda Motor Co that are confirmed to have struck a deal to adopt standards that were lower than Obama era rules but higher than the Trump administration’s 2018 proposal.

Trump administration now wants the 2018 proposal to be split into two parts in the order they can alter standards set in by the Obama administration.

Under Trump, federal regulators are backing a part of the proposal that asks for a freeze on emission requirements for new cars and trucks at 2020 levels through 2026. The Obama-era rules called for a fleet-wide fuel efficiency average of 46.7 mpg by 2025, with average annual increases of about 5%, compared with 37 mpg by 2026 under the Trump administration’s preferred option to freeze requirements.

The final regulation, after amendments, is confirmed, will aim at focusing on a modest boost in annual efficiency requirements but far less than what the Obama administration set in 2012. On its part, California and other states don’t want to lose on the benefit that was bestowed upon them under Obama’s leadership. At the moment, they have vowed to enforce stricter Obama-era emissions standards else Trump is definitely going to roll back the federal rules. On the other hand, automakers feel that the current situation insinuates the possibility of court battles between state and federal governments that could create years of uncertainty and affect the overall business.

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