17 major automakers call on Trump admin not to freeze emissions requirements

U.S. President Donald Trump, next to first lady Melania Trump, waves as he departs Caen Airport, France, June 6, 2019. REUTERS/Carlos Barria

WASHINGTON — A group of major automakers on Thursday backed a compromise on vehicle emissions aimed at heading off a confrontation between California and the Trump administration over requirements through 2026, warning that the lack of a deal could lead to “an extended period of litigation and instability.”

In a letter to California Governor Gavin Newsom signed by 17 major automakers including General Motors, Toyota Motor Corp and Volkswagen AG, the companies urged a compromise “midway” between the Obama era standards that require annual decreases of about 5 per cent in emissions and the Trump administration’s proposal that would freeze vehicle emissions requirements at 2020 levels through 2026.

The automakers are making a last-ditch appeal to try to revive talks in order to avoid years of uncertainty over what rules they will face.

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In a separate letter to President Donald Trump on Thursday, they urged “both the federal government and California to resume discussions and to remain open to regulatory adjustments.”

The letters were also signed by Daimler AG, Hyundai Motor Co and Honda Motor Co Ltd. The companies said a final deal should “also include flexibilities that promote advanced technology for the sake of long-term environmental gains and U.S. global competitiveness.” The letters were not signed by Fiat Chrysler Automobiles NV.

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In February, the Trump administration ended talks with California over federal plans to roll back fuel economy rules, setting the stage for what could be a lengthy legal fight over the state’s ability to regulate greenhouse gas emissions.

White House spokesman Judd Deere said on Thursday that California had “failed to put forward a productive alternative, and we are moving forward to finalize a rule with the goal of promoting safer, cleaner, and more affordable vehicles.”

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California did not immediately comment on Thursday.

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The automakers told Trump a deal “would provide regulatory certainty and enhance our ability to invest and innovate by avoiding an extended period of litigation and instability, which could prove as untenable as the current program.”

Automakers previously said they opposed a freeze but wanted the rules revised to account for changes in oil prices and consumer demand.

California’s rules have been adopted by more than a dozen states. Eighteen states, including California, have vowed to sue the administration if it finalizes the freeze. In August 2018, the Environmental Protection Agency and the National Highway Traffic Safety Administration in a joint proposal called for stripping California of the right to impose stricter emissions rules or to require a rising number of zero-emissions vehicles.

California Air Resources Board chair Mary Nichols in draft remarks last month released by the agency warned that the increasing need to fight climate change “might lead to an outright ban on internal combustion engines.” She later told California news website that no ban was imminent. “The message here was intended to be heard by the auto industry,” she told the site.

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The House Energy and Commerce Committee is planing to call Trump administration officials to testify at a hearing on the vehicle emissions proposal the week of June 17, two people briefed on the matter said.

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In April, Reuters reported that the EPA was expected to require a small increase in the yearly fuel efficiency gains but said the precise figure had not been finalized. EPA Administrator Andrew Wheeler in April told Reuters that “our final regulation is not going to be the same as our proposal.”

California has been allowed to set state standards that are stricter than federal rules under an exemption granted by the EPA.

EPA and NHTSA have not yet submitted their proposal to the White House Office of Management and Budget for review, a necessary step before the final regulation can be published.

The Trump plan would increase U.S. oil consumption by about 500,000 barrels per day by the 2030s but reduce automakers’ regulatory costs by more than $300 billion, the agencies said.

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