Is the “Safe Rule” as Safe as it Sounds? Developments Regarding the Fight Over Automobile Emissions Standards

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The battle surrounding the regulation of automobile emissions standards lost some steam last week after a number of major automakers withdrew their support of the Safer Affordable Fuel-Efficient (SAFE) Vehicles rule enacted by the Trump administration.

Certain major car manufactures are looking to exit the federal litigation, in which automaker trade groups intervened on behalf of the federal government to support the SAFE rules that sought to strip states of the ability to set their own vehicle greenhouse gas emissions and fuel economy standards. These developments came just one day after the government’s motion to hold the litigation in abeyance in light of President Biden’s executive order that directed the U.S. Environmental Protection Agency (EPA) and the National Highway Traffic Safety Administration (NHTSA) to analyze the rule and determine whether it should be rescinded or revised. The D.C. Circuit Court of Appeals granted the government’s motion on February 8, 2021.

California and certain allied states, cities, industry groups, and environmental organizations challenged both parts of the SAFE rule in courts:

  1. The first part of the rule asserts that the Energy Policy and Conservation Act gives the U.S. Department of Transportation the right to set national fuel economy standards, and as part of the “One National Program” rule, the EPA withdrew California’s Clean Air Act waiver that allowed more stringent greenhouse gas standards and a zero-emissions vehicle program.
  2. The second part of the SAFE rule set a 1.5-percent annual increase in the greenhouse gas and Corporate Average Fuel Economy standards for certain car and truck models, which the Trump administration argued would reduce “societal costs” to automakers. With this change, automakers are free from having to rapidly improve technology to meet the standards put in place by President Obama, which gradually raised average fuel economy efficiency standards for passenger cars and light trucks.

Although a coalition of states continue to support the SAFE rule and oppose the challenge led by California, the litigation is in flux after President Biden’s executive order on January 20, 2021, which ordered the immediate review of agency actions taken between January 20, 2017, and January 20, 2021. The executive order specifically directs the EPA and NHTSA to review the SAFE rule and make a recommendation regarding whether the rule should be suspended, revised, or rescinded by April 2021.

A rule change is a near certainty as President Biden has vowed to establish ambitious fuel economy standards and has received pledges from a number of automakers to work with the administration on new rules regarding a reduction in emissions. Further, the new president has made it clear that he will be prioritizing spending and new tax credits for purchases and production of electric vehicles. The court in the SAFE rule litigation has directed the government to provide a status report on the agencies’ review of the rule at 90-day intervals, and to notify the court within seven days of any agency action resulting from the review. The executive order contains a number of interim deadlines, so information about proposed rules changes should emerge shortly.