fuel economy standards, emissions control, regulatory analysis

On last week’s AESI call (June 12, 2017) Senior Fellow and U.S. Co-Lead, John German presented ICCT’s  Analysis of the Harmonization Bill.

Here’s some key takeaways from the presentation:

Download the Full Blunt-Stabenow Bill Analysis
  • The Bill sets the course for delaying the 2017-2021 annual rate of improvement from 4.3%/3.0% (car/LDT) to about 1.2% and delaying the 2025 GHG and CAFE standards by 2 to 6 years.
  • The Bill’s stated rationale is to harmonize the CAFÉ program with the GHG program. In reality, the bill will create 2X windfall credits needed to harmonize.
    • EPA adopted offcycle credits in 2012. NHTSA did not allow for off-cycle credits and instead set standards at lower mpg.
    • EPA and NHTSA try to balance overall stringency. When NHTSA tries to compensate retroactively, then you already have extra credits not needed to comply.
  • OEMS position: don’t change the standard but give us more credits on top of what we have.
  • The vote count in the Senate is close because UAW is not opposing (most likely won’t be interested in changing position publicly but the group does have its concerns with the bill) It’s possible for the bill to get close to 60 votes. It would be useful for us to be talking about value of strong and clear standards to create jobs.
  • There will no longer be an incentive to sell off cycle or on-cycle technology if it’s not necessary for standard compliance.
  • The 6 gallons per mile credit transfer is also important and needs to be considered.

Conclusions:

  1. Awareness is absolutely essential.
  2. AESI must be out there promoting the value of strong, clear standards in creating jobs.

Other suppliers don’t appear to realize the vast negative implications of this bill.  We should be reaching out to other suppliers e.g. Borg Warner.  Others in the industry may believe that California represents a backstop, but today’s regulatory environment shows that EPA Administrator Pruitt may be reading and willing to challenge this.

ICCT is willing to share this presentation with anyone who is interested.  AESI can work with ICCT to inform others in the industry and build support against this bill.