Auto industry: Trump will mend, not end, mpg mandate

Posted by hpayne on April 15, 2017

New York – The Trump administration may have been elected to drain the Washington swamp, but it will not drain federal fuel economy laws.

That was the consensus of a panel of auto industry representatives convened before the New York Auto Show on Tuesday to discuss regulations.

“The talk of a rollback is fallacious,” said Mitch Bainwol, president of the Alliance of Automobile Manufacturers, in reference to the Environmental Protection Agency’s goal that all vehicles average 54.5 miles per gallon. “The pressures to meet fuel economy goals are global. The question is whether the slope is consistent with consumer demand.”

Candidate Donald Trump campaigned on scaling back the Obama administration’s global warming regulations. He called them a threat to job growth. He has wasted no time following through on his promise since entering office and fueled expectations that he might throw out the ambitious goal altogether by calling into question the EPA’s authority to regulate greenhouse gasses under the Clean Air Act.

But Bainwol agreed with Global Automakers trade group President John Bozzella and National Association of Auto Dealers President Peter Welch that – campaign rhetoric aside – the Trump administration would more resemble the George W. Bush administration in its approach to fuel economy laws in trying to broker agreements between industry and environmental players.

 “The administration has signaled that they are going to broker a process to bring… affected parties together to try and negotiate something,” said Bainwol, who talks regularly with EPA administrator Scott Pruitt and other officials.

The Obama EPA’s decision to abrogate the so-called unilaterally “mid-term review” at the end of President Obama’s term enraged automakers. Agreed upon by the agency and automakers in 2009 as part of the auto bailout, the midterm review required that market data be reviewed in 2018 to determine whether the 54.5-by-2025 was attainable.

“The government violated a promise,” Ford CEO Mark Fields said at the Detroit Auto Show in January.

The Trump administration’s rollback of the EPA’s decision was a victory for automakers. Bainwol says that while there may be voices in the administration that favor further steps to review the EPA’s authority to regulate greenhouse gasses, the political reality is that Senate Republicans do not have 60 votes to enact a change in legislation.

As a result, the panel agreed that the Trump administration’s focus will be on crafting one set of mpg rules that automakers can meet nationwide. Once the midterm review data is in, the panel expects new rules by April of next year.

“The question is can we have one clear set of running rules and have the time to get the job done. Right now, we don’t have that,” said Bozzella. “We have three sets of rules, run by two federal agencies and the state of California. It’s a crazy patchwork.”

California, the panel agreed, will be the wild card. Granted a long-standing waiver to set its own emissions targets because its environmental rules pre-date federal laws, California has pursued an aggressive campaign to mandate that automakers not only meet 54.5-by-2025, but that 15 percent of their sales be zero-emission vehicles by that date. Currently, only 3 percent of California sales are electric vehicles – about double the national number.

“California has 43-page bible on how they are going to make the zero-emission vehicle mandate work. But when you look at the numbers, only a small percentage of Californians are buying EVs even with state incentives,” said Kelley Blue Book auto analyst Rebecca Lindland.

Panel members said their automotive clients are committed to greenhouse gas reduction. “The name of the game is the reduction of carbon,” Welch said, but it needs to conform to consumer buying habits.

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