The Obama administration will unveil national tailpipe emissions standards and mileage requirements Tuesday, which will force automakers to dramatically boost the efficiency of vehicles by 2016 to a fleet-wide average of 35.5 miles per gallon, but also give them a single national standard.
The program will cost automakers $1,300 per vehicle, a senior administration official said — a move that could cost automakers $13 billion to $20 billion annually based on total auto sales. That’s $600 ahead of the prior planned fuel efficiency increases.
Under a compromise, California and 13 other states’ efforts to impose a 30 percent reduction in tailpipe emissions are to be essentially adopted by the Obama administration and extended to the rest of the country. The federal government will set mileage standards that are consistent with those emissions requirements — 39 mpg by 2016 for cars and 30 mpg for light trucks.
Administration officials said the new requirements would save 1.8 billion barrels of oil and eliminate 900 million metric tons of greenhouse gases — equivalent to taking 177 million cars and trucks off the roads.
The move will force automakers to average 35.5 mpg overall by 2016 — four years ahead of a congressional deadline and require the companies to boost efficiency by an average of 5 percent per year. It is the first-ever U.S. regulation of tailpipe emissions, rather than simply setting fuel efficiency standards.
But Congress is planning to offer automakers billions more to help them meet the requirements. A revised 942-page version of a climate change bill released late Monday doubles to $50 billion a program to offer low-cost retooling loans to automakers and parts producers to help produce more fuel-efficient models.
The announcement is a major victory for California, though the state won’t get to run the program it has fought to impose since 2002.
It will also allow manufacturers to apply for government assistance for producing plug-in hybrids, and seek money to buy the expensive batteries that would be the heart of such vehicles. The bill creates new programs to aid electric vehicle production.
GM President and CEO Fritz Henderson and UAW President Ron Gettelfinger are among the auto officials who will be on hand Tuesday, along with Ford Motor Co CEO Alan Mulally and Daimler AG CEO Dieter Zetsche, for President Barack Obama’s Rose Garden announcement.
“GM is fully committed to this new approach,” Henderson said. “As the President has previously said, all stakeholders must come together and act with a common purpose and sense of urgency to address the nation’s energy and environmental priorities.”
James Lentz, president of Toyota Motor Sales, USA, Inc., said the Japanese automaker had long sought a coordinated standard for fuel economy and greenhouse gas emissions. “The big winner is customers,” Lentz said. “A unified national program ensures American consumers will have the choice of vehicles they want and need, as well as the fuel efficiency and low emissions they expect, without the potential confusion of multiple standards.”
Ford also praised the announcement.
California and many other states have long sought to impose their own tailpipe emissions standards, but were stymied by the Bush administration, which refused to grant them a waiver to do so under the Clean Air Act. Automakers fought in court for years to block the standards and lobbied government officials to stop them. The administration won’t immediately act on California’s waiver request, so it is unclear what will happen to the state’s initiative.
The Obama regulation, which is backed by major automakers, will order the Environmental Protection Agency and National Highway Traffic Safety Administration to work together to issue a joint regulation setting the new tailpipe emissions limits and mileage standards by next year
In addition to top officials from Detroit’s Big Three automakers, Gov. Jennifer Granholm and California Gov. Arnold Schwarzenegger, are expected to attend Tuesday’s announcement. Automakers will drop their lawsuits as part of the deal.
Officials said NHTSA and the EPA will work together to jointly issue regulations to ensure that the tailpipe emissions and fuel economy regulations are harmonized. Automakers will also be able to push for credits toward meeting tailpipe emissions requirements — as they currently have for fuel economy standards. The two agencies will also use NHTSA’s “footprint,” or attribute-based system, which considers a vehicle’s size, to set emissions requirements — something California’s rules didn’t include.
California officials declared victory.
“The Obama administration has brought together the federal government, the state of California, and the auto industry behind new national automobile emissions standards that follow California’s lead,” said Sen. Barbara Boxer, D-Calif., chairwoman of the Senate Environment and Public Works committee. “This is good news for all of us who have fought long and hard to reduce global warming pollution, create clean energy jobs, and reduce our dangerous dependence on foreign oil.”
Automakers get more flexibility to meet the yearly numbers — and more leeway in the early years of compliance. Most importantly, this deal appears to prevent California and other states from setting higher state standards in the future.
The Obama administration has been reviewing California’s request for three months. But the administration has been sympathetic to the concerns raised by automakers that two sets of standards would cause problems.
The deal may finally end a long-running dispute between California and Michigan.
Automakers have said state-by-state regulations would cost them tens of billions of dollars and fought California’s efforts for years — losing in three federal courts.
The new regulations take effect with the 2012 model year. In April, the Obama administration hiked the 2011 model year fuel efficiency standards to a fleet-wide average of 27.3 mpg.
In April 2007, the Supreme Court granted the EPA sweeping authority to regulate tailpipe emissions as a danger to human health. The EPA has proposed declaring tailpipe emissions a threat to human health and held a public hearing Monday on the issue in Virginia.
Greenhouse gas emissions from cars, light trucks and other vehicles in 2006 accounted for nearly 24 percent of U.S. emissions, with 94 percent of those emissions carbon dioxide, according to the EPA. U.S. autos accounted for 4.3 percent of worldwide emissions.