Trump administration moves closer to rolling back U.S. vehicle fuel economy increases

WASHINGTON (Reuters) – New rules enacting President Donald Trump’s reductions in fuel efficiency standards for new vehicles through 2026 moved closer to reality on Tuesday when U.S. agencies sent proposals to the White House for final review.

After more than 17 months of discussion, the National Highway Traffic Safety Administration (NHTSA) and Environmental Protection Agency (EPA) submitted proposed rules for 2021 through 2026 model year fuel efficiency to the White House Office of Management and Budget, the agencies said.

Final rules are expected as early as late February or March, officials said.

The administration of former President Barack Obama had required car manufacturers to achieve roughly 5% annual increases in vehicle fuel efficiency through the 2026 model year.

The Trump administration proposed in August 2018 freezing fuel efficiency standards at 2020 levels through 2026, erasing the increases the Obama administration enacted, but officials will not finalize that proposal.

“We’re not going to be flat, as was proposed,” Acting NHTSA Administrator James Owens told Reuters in a recent interview. “We’re going to set standards that are reasonable and achievable.”

Several automakers told Reuters they anticipate annual fuel efficiency increases of about 1.5%, much less stringent than the Obama rules, but administration aides said the proposal, which is around 2,000 pages, underwent significant revisions.

EPA said the final rules “will benefit all Americans by improving the U.S. fleet’s fuel economy, reducing air pollution, and making new vehicles more affordable for all Americans.”

The administration has argued that the rollbacks are necessary for economic and safety reasons, but California and environmentalists reject that analysis, saying consumers would spend hundreds of billions more in fuel costs.

The administration’s 2018 proposal would have resulted in average fuel efficiency of 37 miles per gallon (mpg) by 2026, compared with 46.7 mpg under rules adopted in 2012.

The Trump administration’s “preferred option” would have hiked U.S. oil consumption by about 500,000 barrels per day by the 2030s but reduced automakers’ regulatory costs by more than $300 billion.

Trump has sought to reverse Obama’s climate change policy, which was aimed at reducing greenhouse gas emissions.

In November, California and 22 other states challenged the administration’s decision in September to revoke California’s authority to set stiff vehicle tailpipe emissions rules and require a rising number of zero emission vehicles. They also vowed to sue when the administration finalized the new requirements.

Major automakers – including General Motors Co, Toyota Motor Corp, and Fiat Chrysler Automobiles NV – backed the administration’s effort to bar California from setting tailpipe standards.