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Washington Watch: Biden administration restores waiver for California and other states to set tougher vehicle tailpipe standards

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The Biden administration has reinstated, as expected, the waiver that allows California and other states to adopt stronger vehicle tailpipe emissions rules than the federal standard.

The National Highway Traffic Safety Administration (NHTSA) finalized on Friday its fuel economy rule, which is expected by some to drive innovation toward cleaner technologies, such as electric vehicles. Finalizing this rule, which had circulated through the EPA as well, was the last step the administration needed to take to reverse the previous administration’s rollback of the federal Clean Car Standards. 

Seventeen states and the District of Columbia had adopted their own clean car standards, representing more than 40% of the U.S. population, and six states had adopted a new advanced electric-truck standard, mostly for commercial fleets, that requires a waiver. That would cover 20% of the truck market.

“We proudly reaffirm California’s longstanding authority to lead in addressing pollution from cars and trucks,” EPA Administrator Michael Regan said in a release Wednesday.

“Our partnership with states to confront the climate crisis has never been more important,” he said. “With today’s action, we reinstate an approach that for years has helped advance clean technologies and cut air pollution for people not just in California, but for the U.S. as a whole.” 

In 2019, the Trump administration rolled back California’s decades-old waiver. Biden’s administration in its early days in the White House said it would start the process of putting the waiver back in place.

The EPA had withdrawn the interpretation of the Clean Air Act that would prohibit other states from adopting the California GHG emission standards. As a result, other states may choose to adopt and enforce California’s GHG emission standards in lieu of the federal standards, the agency said.

As for that federal standard, the EPA in December announced that efficiency benchmarks for cars and light trucks would move to 40 miles per gallon by the 2026 model year. That’s a bump up from 38 mpg under an earlier proposal.

The standards will save consumers money on fuel and will prevent 3.1 billion tons of planet-warming emissions from being pumped into the atmosphere, according to an EPA fact sheet.

Read: Biden tells states to roll ahead with electric-vehicle charging network — plans for a station every 50 miles

“As the market shifts to zero-emission electric vehicles, these rules are essential to make sure every fossil fuel-powered vehicle that remains is having as little impact on our warming climate as possible,” aid Environment America Destination: Zero Carbon Director Morgan Folger. 

Automakers, which must plan their production years out and react to the increasingly pro-environmental sensibilities of younger drivers, have historically shown a mixed reaction to tougher standards, and the waivers. Their lobbying efforts first urged Trump to rein in standards, but then some outspoken manufacturers said restrictions in setting higher standards risked going too far or setting up dueling standards that could create market uncertainty that would drive up car prices.

“EPA’s final rule for greenhouse gas emissions is even more aggressive than originally proposed, requiring a substantial increase in electric vehicle sales, well above the 4% of all light-duty sales today,” John Bozzella, CEO of the Alliance for Automotive Innovation, said in a statement in December.

Plus, automakers tend to finance their electric-vehicle market push with sales of conventional vehicles.

Many automakers aim to take a larger share of the EV market, but they prefer a flexible timeline. That extends from Kia’s
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Chief Executive Jim Farley took to Twitter to say the auto maker would do “whatever it takes” to become the second largest electric-vehicle maker.

Read: Chasing Tesla: Here are the current electric vehicle plans of every major car maker

Market tracker LMC Automotive expects EVs to make up 34.2% of new U.S. sales by 2030, with all-electric at 30.1% and plug-in gas/electric hybrids at 4.1%. Sales of EVs, including plug-in hybrids, were only about 4% of total U.S. vehicle sales in 2021. Still, that marked a doubling a growth from just a year earlier.

“ ‘Restoring this waiver gives states the ability to once again reduce polluting emissions, while saving consumers money on cars and trucks that go further on a gallon of gas, or no gas at all.’”

— Dr. Quinta Warren, Consumer Reports

California has historically had the most aggressive emissions standards, setting the tone for other states that have adopted pro-environmental stances. Its governor, Democrat Gavin Newsom, applauded the anticipation of the waiver’s return when Biden announced he would review the process.

In 2020, Newsom signed an executive order mandating that all vehicles sold in the state must be zero-emissions by 2035.

Read: Flurry of EV commercials during Super Bowl led to huge jump in searches for this particular SUV

Liane Randolph, chair of the California Air Resources Board, said at the time of the Trump rollback that the action went against her state’s progress in combating pollution and the longer-run effects of global warming.

“We know the air quality in California is cleaner today than in decades. Californians can see mountains in the Los Angeles area, no longer shrouded by smog. And the air quality continues to improve because of our program,” she said then.

Another member of the CARB told CNN this week that California wasn’t likely to go much beyond federal standards for cars currently, but wanted more say when it comes to heavy-duty and light-duty zero-emission rules for cars and trucks.

Read: There’s a smart way to invest in the clean-energy transition right now (and not just EVs, solar and wind)

“‘Certainly the public understands that cars are a big source of pollution.’”

— Paul Billings, American Lung Association

At least one consumer group welcomed the move.

“Consumers across the country want and deserve better access to clean cars,” Dr. Quinta Warren, associate director of sustainability policy at Consumer Reports, told MarketWatch. “Restoring this waiver gives states the ability to once again reduce polluting emissions, while saving consumers money on cars and trucks that go further on a gallon of gas, or no gas at all.”

“It is critically important that states have this authority to put strong standards in place for times when the federal government fails to act, or rolls back standards as we saw with the previous administration,” Warren added.

Paul Billings, senior vice president for advocacy at the American Lung Association, agreed that their wallets may be the first consideration for consumers when it comes to auto efficiency. But health can’t be ignored.

“You know, if you’d asked me a couple years ago, I thought it’d be crystal clear, but I’m not so sure how Americans process health information these days. But I do think that protecting one’s health, protecting the health of their family members, you know, makes it very personal for people,” Billings said. “And certainly the public understands that cars are a big source of pollution. And so I do think that the public would prefer to have less pollution in their lives. And I think that’s what makes zero- emission vehicles attractive.”

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