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30 Jul 19

Car makers, California and Colorado cut CO2 more than Trump wants them to

California has not been the President’s favourite state, with its stricter-than-federal emission target proposals. Colorado has now joined the Golden State in planning to implement light vehicle emission reduction targets that make the proposed federal ones look preposterously inadequate. Remarkably, both states are supported in their targets by several car makers, including BMW, Ford, Honda, VW, GM, Toyota and Hyundai.

It seems the world has turned upside down. In Europe, OEMs are paying hundreds of lobbyists to soften legal emission requirements, which they find unrealistic, unjustified, too costly and therefore detrimental to employment in the region. In the USA, some of them have agreed to do more than what President Trump wants them to.

California leads the way

In fact, they will be voluntarily lowering the CO2 emissions according to the targets set out by President Obama’s administration – which his successor wants to alleviate. Together, BMW, Ford, Honda and VW, which represent 30% of the Californian new car market, have agreed to lower the volume-weighted average carbon dioxide emissions of their fleet by 3.7% per annum for five years.

To make things concrete: that means hitting 4.7L/100km (40 mpg) by 2026 instead of 6.3l/100km (37mpg) – a relative difference of more than 25% on paper and billions of tonnes of CO2 in reality. To reach that goal, car makers need to sell a lot of electric vehicles, something the state of California promises to help them with through various consumer incentives.

Already in 1990 did California introduce the ZEV (zero emission vehicle) mandate, requiring the sale of an increasing number of electric vehicles or other zero-emission vehicles.

Last year, California forecast that about 8% of its new vehicle sales in 2025 will be zero-emission and plug-in electric hybrids.

Colorado joins California for 2023 model year

Earlier this week, the State of Colorado announced it had reached a deal with major automakers to adopt California’s zero-emission vehicle requirements starting in the 2023 model year. It will allow car makers to earn credits for every electric vehicle they sell in the two model years prior.

In June, talks between Colorado and the OEMS had failed, but in the meantime the car makers have agreed, saying Colorado committed to support the increased adoption and sale of ZEVs, including the state’s commitment to increase the number of ZEVs in its vehicle fleet.  

The Colorado agreement is yet to be approved by the state's Air Quality Control Commission, which is expected to convene in the coming weeks.

The battle is not won

A few big names have pledged to lower their emissions to Obama-levels, but at least as many have not. FCA, Nissan, Mazda and Subaru, for instance, have remained uncommitted so far.

Also, President Trump will take out all the stops to try and bar California from imposing its own vehicle emission rules or setting requirements for zero-emission vehicle sales. The administration is expected to finalize that regulation this autumn. California and 18 other states, including Colorado, have stated they will legally combat the Trump administration’s freeze.

This may leave automakers in regulatory uncertainty for years. As to global companies with emission reduction goals, they might have to review their supplier list over the next few years.

Authored by: Dieter Quartier