On August 10, the U.S. Environmental Protection Agency (EPA) issued a Notice of Proposed Rulemaking (NPRM) for new, more stringent light-duty vehicle (LDV) greenhouse gas (GHG) emission standards for model years (MY) 2022 through 2026. This proposed rule seeks to replace the less stringent targets set under the SAFE Rule, whose legal grounding was presented in September 2019 (Part I) and whose specific targets were subsequently outlined in April 2020 (Part II). Per SAFE Rule targets, the required fleetwide average efficiency of new LDVs would have had to reach 205 gCO2/mi by MY 2026.
The NPRM seeks instead to achieve a MY 2026 target of 171 gCO2/mi--a target similar to the one initially via California's own separate agreement with five OEMs (the agreement was finalized in August 2020). that the California agreement would serve as a template for the federal governments GHG emissions proposal. The California target, in turn, would have met, with a one-year delay, the target set for MY 2025 LDVs by the Obama-era CAFE Final Rule issued back in 2012.
Fleetwide GHG emissions reduction targets under August 10 NPRM
Unlike what had been standard practice since the fuel economy rule issued in 2010 (covering MY 2012 through MY 2016), the new NPRM was issued only by EPA, and was not a joint rule issued by EPA and the National Highway Traffic Safety Administration (NHTSA). However, the EPA justified this approach by noting that the agencies had been in close coordination in deliberations over the NPRM; also worth mentioning, the proposed repeal of the SAFE rule published in May of this year was issued only by NHTSA, and not the EPA.
As part of its rationale for revising the SAFE rule, the EPA recapped a long list of automaker announcements of future implementation plans of low-carbon powertrains:
✓January 2021: General Motors announced plans to become carbon neutral by 2040, including an effort to shift its light-duty vehicles entirely to zero-emissions by 2035
✓March 2021: Volvo announced plans to make only electric cars by 2030
✓March 2021: Volkswagen announced that it expects half of its U.S. sales will be all-electric by 2030
✓April 2021: Honda announced a full electrification plan to take effect by 2040, with 40 % of North American sales expected to be fully electric or fuel cell vehicles by 2030, 80 % by 2035 and 100 % by 2040
✓May 2021: Ford announced that they expect 40 % of their global sales will be all-electric by 2030
✓June 2021: Fiat announced a move to all electric vehicles by 2030, and in July 2021 parent company Stellantis announced an intensified focus on electrification across all of its brands
✓July 2021: Mercedes-Benz announced that all of its new architectures would be electric-only from 2025, with plans to become ready to go all-electric by 2030 where possible
At the same time, the EPA stated that, in the analysis it produced in support of the rule's draft regulatory impact statement, the targets it is proposing can largely be met by improvements in gasoline internal combustion engine technology alone, with little recourse (yet) to other technologies such as electric vehicles or fuel cell vehicles.
Additionally, the EPA noted that it is including in the NPRM a number of additional flexibilities to ease compliance:
✓A limited extension of carry forward credits generated in MYs 2016 through 2020
✓An extension of the advanced technology vehicle multiplier credits for MYs 2022 through 2025 with a cumulative credit cap
✓Restoration of the 2012 rule’s full-size pickup truck incentives for strong hybrids or similar performance-based credit for MYs 2022 through 2025 (provisions which were removed in the SAFE rule)
✓An increase of the off-cycle credits menu cap from 10 g/mile to 15 g/mile
The rule comes nearly three months after President Joseph Biden issued , pledging a 50% reduction by 2030, and nearly seven months after Biden issued an Executive Order mandating a review of the SAFE Rule. It also comes at a time during which the weighted-average, on-road "real world" efficiency of new vehicles (i.e. a measure that strips out the compliance credits EPA grants as part of its GHG emission rule flexibilities) has begun to stagnate after meaningful progress earlier in the decade.
The EPA has established a deadline for acceptance of written comments on the rule of September 27, 2021.