Cleantech
Automakers, California Reach Landmark Agreement on Clean Emission Standards

As the White House prepares to roll back emission standards for light-duty cars and trucks, put in place by the Obama administration, a consortium of automakers — Ford, Honda, BMW of North America and Volkswagen Group of America — have taken it upon themselves to reach a voluntary agreement with California to reduce emissions that can serve as an alternative path forward for clean vehicle standards nationwide.

Under the new framework, the automakers will increase the average fuel economy of their new vehicles to nearly 50 miles per gallon by model year 2026 — an increase of 3.7 miles per gallon per year. The deal also encourages innovation to accelerate the transition to electric vehicles, and provides the auto industry the certainty needed to make investments and create jobs (read more about the framework here). The commitment means that Ford, Honda, BMW and VW (which may still have a ways to go to regain the public's trust on the subject of emissions standards) will only sell cars in the US that meet these standards; and it leaves room for other automakers to adopt them, as well.

California has had the ability to set its own air standards since the Clean Air Act was established in 1970, though the current administration is trying to revoke that right, alongside its attempt to lower national emissions standards. California’s standards have remained higher than the EPA’s — despite ongoing pushback from the current administration — and 12 other US states, and Canada, have adopted California’s rules.

“Few issues are more pressing than climate change, a global threat that endangers our lives and livelihoods. California, a coalition of states and these automakers are leading the way on smart policies that make the air cleaner and safer for us all,” Governor Gavin Newsom said in a statement. “I now call on the rest of the auto industry to join us, and for the Trump administration to adopt this pragmatic compromise, instead of pursuing its regressive rule change. It’s the right thing for our economy, our people and our planet.”

In a letter last month, 17 global automakers appealed to the White House and California to come together on a single national standard, warning of uncertainty for the auto market and for auto industry jobs. Now, four of these companies have agreed to a framework that includes annual emission reductions and would speed the transition to electric vehicles.

“These terms will provide our companies much-needed regulatory certainty by allowing us to meet both federal and state requirements with a single national fleet, avoiding a patchwork of regulations while continuing to ensure meaningful greenhouse gas emission reductions,” the four companies said in a joint statement.

Under the framework, gasoline and diesel cars and light trucks will get cleaner through 2026 at about the same rate as the current program. It also supports a national program that will result in at least 30 percent more GHG reductions, compared to splitting up the standards between those followed by California and 12 other states (and now, Canada), and the less stringent standards proposed by the EPA.

California urges the White House to reflect the principles in its new vehicle emissions framework — but the State says the approach laid out in the framework will move ahead, regardless of federal support.

“This agreement represents a feasible and acceptable path to accomplishing the goals of California and the automobile industry,” said California Air Resources Board (CARB) Chair Mary D. Nichols. “If the White House does not agree, we will move forward with our current standards but work with individual carmakers to implement these principles. At the same time, if the current federal vehicle standards proposal is finalized, we will continue to enforce our regulations and pursue legal challenges to the federal rule.”

The announcement comes as the White House is preparing to roll back federal vehicle emission standards, effectively freezing them at the 2020 level through the 2026 model year — a move that threatens air quality and the health of millions across the US, would increase costs to consumers, and promises to further set back US efforts to combat climate change.

The rollback has faced growing opposition from a broad array of governors and mayors, auto companies, labor, consumer groups, public health organizations and environmental groups. Earlier this month, a bipartisan coalition of 24 governors representing more than half the US population called for a stronger, national clean car standard.

Reactions

While today’s announcement feels like a win, as business bands together to fight for necessary changes in policy to ensure a healthy future, the government remains unswayed.

“The Trump Administration is pursuing one national standard and certainty for the entire auto market that will provide safe, affordable vehicles for consumers while also improving environmental outcomes,” EPA spokesperson Michael Abboud said in a statement. “Today’s announcement from CARB has no impact on EPA’s regulation of greenhouse gas emissions under the Clean Air Act. This voluntary framework is a PR stunt that does nothing to further the one national standard that will provide certainty and relief for American consumers.”

Unsurprisingly, environmental groups disagree.

“This announcement reaffirms the authority of California — and every other state — to set eminently achievable vehicle pollution standards that protect the public and curb carbon pollution,” Luke Tonachel, director of clean vehicles and fuels at the Natural Resources Defense Council, said in a statement. “The agreement clearly demonstrates that the Trump administration’s rollback, which has no technical or legal rationale, is doomed. The administration should drop its senseless and harmful plan that would make cars pollute more and cost drivers more at the pump.”

Admiral Dennis Blair, a council member of nonpartisan group Securing America’s Future Energy, told The Verge he hopes the deal will “revitalize discussions with the Trump administration” regarding emissions. “We commend Ford, Volkswagen, Honda and BMW of North America for thinking outside the box and making the effort,” he said.

Your move, industry

While Fiat Chrysler, GM and Toyota all declined to comment on whether they will sign onto the new framework, they all expressed support for continued improvement of emissions and fuel economy standards, and a nationwide transition to electrified vehicles. It will be interesting to see if more companies engage and continue the momentum generated by today’s announcement.