Trump Administration Freezing Fuel Efficiency Penalties

Stringer/Reuters

The Trump administration said late on Friday it was issuing final rules to suspend a 2016 Obama administration regulation that more than doubled penalties for automakers failing to meet fuel efficiency requirements.

Congress in 2015 ordered federal agencies to adjust a wide range of civil penalties to account for inflation and, in response, the National Highway Traffic Safety Administration (NHTSA) under President Barack Obama issued rules to eventually raise fines to $14 from $5.50 for every 0.1 mile per gallon of fuel that new cars and trucks consume in excess of the required standards.

Automakers protested the hike, saying it could increase industry compliance costs by $1 billion annually.

After a group of states and environmental groups filed suit, the Trump administration began the process of formally undoing the Obama regulation and first proposed the freeze in 2018.

In a statement late on Friday, NHTSA said it was faithfully following the intent of Congress to ensure the penalty rate was set at the level required by statute.

It expected this final rule to significantly cut the future burden on industry and consumers by up to $1 billion a year, it added.

The Alliance of Automobile Manufacturers, a trade group representing General Motors Co <GM.N>, Volkswagen AG <VOWG_p.DE>, Toyota Motor Corp <7203.T>, Fiat Chrysler Automobiles NV <FCHA.MI> and others, had said it could increase industry compliance costs by $1 billion annually.

Late on Friday, Gloria Bergquist, a spokeswoman for the group, praised the decision, saying NHTSA’s “own model clearly shows the significant economic harm that such a dramatic and unjustified increase in penalties would have on auto manufacturers, workers, and ultimately consumers.”

The prior administration had “failed to take into account the significant economic harm that would result,” she added.

Automakers argued the increases would dramatically raise costs, since they would also boost the value of fuel economy credits that are used to meet requirements.

In September 2017, three environmental groups and some U.S. states including New York and California sued NHTSA for putting the Obama rules on hold.

Last year, the states said, “If the penalty is not sufficiently high, automakers lack a vital incentive to manufacture fuel-efficient vehicles.”

Some automakers historically have paid fines instead of meeting fuel efficiency requirements – including some luxury automakers like Jaguar Land Rover, owned by India’s Tata Motors <TAMO.NS>, and Daimler AG <DAIGn.DE>.

In February, Fiat Chrysler told Reuters it paid $77 million in U.S. civil penalties in 2018 for failing to meet 2016 model year fuel economy requirements.

Fiat Chrysler welcomed the decision.

It “enables us to continue our significant investment plans in both our U.S. manufacturing footprint and new technologies required to maintain our trajectory of improved fuel-efficiency,” the carmaker said in a statement late on Friday.

Environmental groups urge the administration to retain the increase, noting U.S. fuel economy fines have lost nearly 75% of their original value because the fines have only been increased once — from $5 to $5.50 in 1997 — in more than four decades.

The move comes as NHTSA and the Environmental Protection Agency are working to finalize a rewrite of the Obama administration’s fuel efficiency requirements through 2026 in the coming months.

In August 2018, the administration proposed freezing fuel efficiency requirements and stripping California of the right to set its own vehicle-emissions rules.

The final regulation faces a multi-year legal battle that could leave automakers in limbo about future emissions and fuel-efficiency requirements.

The Obama-era rules called for a fleetwide fuel-efficiency average of 46.7 miles per gallon by 2026, compared with 37 mpg under the Trump administration’s preferred option.

Last month, 17 major automakers urged a compromise “midway” between the Obama-era standards that require annual decreases of about 5% in emissions and the Trump administration’s proposal.

Reuters reported in April that officials expect the final rule will include a small increase in yearly fuel-efficiency requirements.

(Reporting by David Shepardson; Editing by Jacqueline Wong and Clarence Fernandez)

What do you think?

13 pledges
Upvote Downvote

Comments

newest oldest most voted
Notify of
Screwtape
Member

In case nobody else has mentioned this before (IJR’s commenting is as lame as Obozocare): It’s a scam. OR, as an example, requires emissions testing on cars before 2014 ONLY. No requirements even on diesels after 2014 or motorcycles, ATVs, or boats) Those are free to be as polluting and ‘nongreen” as ever. Those not passing can go to an “approved” shop for “fixes” whether they then pass emissions tests or not. Here’s what I wonder: (besides the obvious scam). Why no safety checks? NY, NJ, CT, etc. require function tests for safety and operability. There are vehicles out there… Read more »

Screwtape
Member

Let’s have the elite demonstrate their dedication. Give up your multiple mansions, lux cars, private jets, and mega-yachts FIRST if you really believe what you say.

Drive your electric cars and run your homes ONLY on wind or solar. Let us know how that works, though I suspect a lot of elite might find their Montana estates a tad chilly and off the net and their coastal manses a tad warm in summers.

Screwtape
Member

Fleet fuel economy standards are as much a scam as every Al Gore utterance. It’s designed to give the government more money, just like Gore, and more control.

How to meet standards when the PUBLIC (also the elite and government) demand big SUVs and trucks? Let’s make econoboxes on wheels ! Notice how neither the government nor elite will drive these. They could care less that it also increases traffic fatalities.

Otis
Member

The United States is so mean. We all hate the environment don’t we?

Phyllis Softa
Member

IJR readers are a very rare breed—Either you all have company gas cards, do not own a vehicle, or have nothing better to do with your money & time. You cheer Americans being able to visit the gas station MORE frequently for fill ups. Make America Sane Again.

Henry Sisson
Member

“Environmental groups urge the administration to retain the increase, NOTING U.S. FUEL ECONOMY FINES HAVE LOST NEARLY 75% OF THEIR ORIGINAL VALUE because the fines have only been increased once — from $5 to $5.50 in 1997 — in more than four decades.” Sounds like a scam from the get-go to rake in money for the government. “In August 2018, the administration proposed freezing fuel efficiency requirements and stripping California of the right to set its own vehicle-emissions rules.” This should have been done long ago. California needs to follow Federal Regulations just like any other state. Lets boot California… Read more »

Otis
Member

My only comment is that the lefty-Globalists again want the U.S. to be the bad guys.
Btw: if I do say so myself, on another article I think one of my best replies ever was considered ‘spammer’ and that is bullshit.

Judith Cook
Guest
Judith Cook

Are these cars manufactured in the US? How much have they spent to meet the goal? Why does big business win again.

Loading…

0

Comments

0 comments

U.S. Regulators Approve $5 Billion Facebook Settlement over Privacy Issues: Source

Epstein Sought to Pay Off Potential Witnesses, U.S. Prosecutors Say