EPA Issues Final Emission Standards

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The Environmental Protection Agency announced March 20 final national pollution standards applicable to cars, light-duty trucks, and medium-duty vehicles. These standards apply to vehicles manufactured beginning in 2027. The new standards will be phased in on vehicles manufactured until 2032. 

The EPA estimates the new standards will avoid more than 7 million tons of carbon emissions. The standards also are estimated to provide over $100 billion in net benefits to society – including $62 billion in reduced fuel costs and $13 billion in public health benefits from improved air quality.

The new standards were finalized under the EPA’s authority in section 202(a) of the Clean Air Act and were announced following extensive public comment periods and three days of virtual public hearings in May of 2023. According to the EPA, the transportation sector represents 29 percent of total greenhouse gas emissions – with light-duty vehicles contributing 58 percent of that number.

The new standards establish both criteria pollutant and greenhouse gas standards and require auto manufactures to slash emissions of greenhouse gasses like carbon dioxide and air pollutants that contribute to soot and smog. For light duty vehicles, the EPA expects that the rules will result in an industry wide emissions target of 85 grams of carbon dioxide per mile – a 50-percent reduction compared to existing standards. For medium-duty vehicles the average CO2 emissions target is a 44-percent reduction.

The final rules are less strict than those proposed a year ago and reflect input from auto makers, labor unions, and car dealers. Manufacturers will have the discretion to choose the mix of technologies that achieve compliance across their fleets. These technologies will include advanced gasoline engines that reduce engine-out emissions, improvements in tailpipe controls, additional electrification of gasoline powertrains, and electric powertrains.

The rule is not an electric vehicle mandate. Instead, over the next decade, manufacturers will have to offer consumers a range of vehicle types that shift to cleaner emissions overall.  Consumers will still have the option to purchase gas-powered vehicles with particulate filters as well as gas-electric hybrids. The EPA does estimate that the automotive industry can meet the new standards if 56 percent of new vehicle sales are electric by 2032. United States electric vehicle sales increased by 50 percent in 2023 but still reflect only about 10 percent of new car sales. 

The Alliance for Automotive Innovation reported this year, however, that there has been a very significant growth in electric vehicle sales from 2021 through 2023. Further, 2023 marked the first time in U.S. history that electric vehicle sales surpassed 1 million, making this estimate one that seems doable if the industry stays on track to exceed these sales numbers.