On April 1, 2020, the Environmental Protection Agency announced its final rule to rollback Obama-era automobile fuel efficiency standards. The new rule will allow vehicles on American roads to emit nearly a billion tons more carbon dioxide over the lifetime of the vehicles than they would have under the prior administration’s standards.
The new rule, which is expected to be implemented by late spring, will roll back a 2012 rule that required automakers’ fleets to average about 54 miles per gallon by 2025. Under the new rule, the fleets have to average approximately 40 miles per gallon. To meet the new requirements, fuel economy standards would have to rise by about one and a half percent a year, compared to the five percent annual increase required by the current rule. Prior to the implementation of the rule, the auto industry has seen an average annual increase in fuel economy of approximately two and a half percent.
According to a draft of the new plan, the new standard would lead to the consumption of about eighty billion more gallons of gasoline over the lifetime of the vehicles built during the terms of the rule.
While many large automakers had sought for the new administration to slightly loosen the Obama-era rule, the industry had urged it not to roll it back as far. The rollback is already being opposed by the California Air Resources Board, which has planned to adopt and enforce the prior administration’s planned fuel economy standards. Additional litigation from other groups is likely, leading to years of potential litigation. That scenario is likely to leave the auto industry in regulatory limbo as they face competing regulations and have little to no guidance as to what standards may be applicable.