Trump administration completes rollback of fuel efficiency rules

He said he’d do it and now he has: Donald Trump has rolled back the fuel efficiency rules introduced by the Obama administration. The fight for tougher standards isn’t over, though.

Under the Obama administration rules, efficiency needed to increase by 5% annually until 2026, an ambitious target that was seen as one of the most ambitious US policies aimed at combating climate change at the time. The new rules lowered this target to a 1.5% annual increase, a move the Trump administration calls its single biggest deregulatory action to date.

According to Trump, this deregulatory action could save carmakers upwards of $100 million in compliance costs.

California Coalition

Under the US Clean Air Act of 1963, the state of California had the right to enforce tougher emission standards than the ones imposed by the federal authorities. Over the years, thirteen other states had taken to adhering the California emission rules.

The Trump administration, however, also revoked California’s authority to set its own standards, a decision that is being challenged by the coalition of states backing California.

Regardless, Ford, BMW, Honda and Volkswagen struck a voluntary deal with California last year on emissions rules that are more ambitious than the ones introduced by the federal authorities. Volvo is also in talks to reach a similar agreement.

The move of these carmakers, which bypassed Trump’s efforts to strip California of its authority to impose its own rules, irked Trump. Last month, the US Justice Department closed an antitrust investigation into the carmakers’ agreement with the state of California without taking any action.

Lower, unless it’s higher

GM, FCA, Toyota and various smaller carmakers have sided with the Trump administration.

The Trump administration maintains the new emission rules will lead to lower new vehicle prices as the car industry will have to invest less to achieve compliance. Environmentalists, however, dispute this analysis and point out overall vehicle ownership costs are expected to go up.

On 1 April, perhaps a befitting date, Donald Trump tweeted his new emission standards will lower the average price of a car by more than $3,500, make cars safer and have a positive impact on the environment.

The state of California and various environmental groups have pledged to fight the new rules in court.

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