Friday, August 6, 2021

Newly proposed auto standards hold promise

The Biden Administration is clearly making good on its pledge to revisit the automobile GHG emission standards weakened by the previous administration. The notice of proposed rulemaking issued by EPA on August 5, 2021 aims to cut model year 2026 car and light truck GHG emission rates 17% compared to the recent level, from 205 grams/mile (g/mi) in 2020 to a nominal target of 171 g/mi in 2026. 

The White House announcement just prior to the EPA proposal also states an ambitious goal for EVs to comprise half of U.S. vehicle sales in 2030. This non-binding target would include plug-in hybrid electric vehicles (PHEVs) as well as pure zero-emission vehicles such as battery electric and fuel cell cars. 

The new fleet average targets proposed by EPA are "nominal" because of the many flexibilities built into the regulations. These provisions include extra credit given for various electric vehicles (EVs), hybrid pickup trucks and the ability for automakers to carry forward credits they had earned in previous model years. The agency is also tweaking the off-cycle credits, which aim to improve real-world fuel economy by motivating automakers to make engineering changes that save fuel in ways that are not picked up on the test cycles used to evaluate vehicles for regulatory purposes.  

As has been the case for many recent model years, the actual GHG emission rates achieved by the fleet will be higher than the nominal target values. Nevertheless, the agency is proposing to sunset the extra EV and pickup truck credits after 2025 -- a good idea given the way such credits cause higher emissions from the bulk of the fleet that still runs only on gasoline. 

In terms of fuel economy, the actual 2026 fleet will be much less fuel-efficient on the road than it might seem from the 52 mpg value highlighted in the announcement. EPA's accompanying fact sheet notes that the 52 mpg target corresponds to a 38 mpg estimated "real world" value. However, even that number seems likely to be higher than what actually would be achieved. For perspective, the estimated value for the standard in 2020 is 32.2 mpg, while the actual 2020 new fleet average most recently projected in EPA's annual Automotive Trends report was 25.7 mpg, i.e., 20% lower (which implies emissions about 21% higher). 

The August 5, 2021, regulatory proposal is also notable because comes only from EPA. That's in contrast to the prior joint EPA-NHTSA rules that issued CAFE standards in coordination with GHG emission standards. Global warming is now a far more pressing problem than the energy security concerns that motivated CAFE standards over 45 years ago. Could it be that fuel economy standards are ready to be discarded? Having both CAFE and GHG standards entails duplicative federal agency efforts, creating two legally distinct regulations that motivate largely similar vehicle design changes. The executive branch, however, does not have the discretion to drop CAFE standards itself. That would require a change in law through Congressional action, something perhaps unwise to invite in these times of hyper-partisanship. 

All in all, the Biden Administration's proposal is definitely a great start in the effort to rebuild a robust national policy for cutting carbon from transportation, the nation's largest source of GHG emissions.