The U.S. Environmental Protection Agency has denied California’s waiver request to regulate carbon dioxide (CO2) emissions from automobiles starting in 2009. The CO2 rules were issued by the California Air Resources Board and adopted by 12 other states. The EPA overturned the regulations on the same day that President Bush signed into law an energy bill to raise the Corporate Average Fuel Economy (CAFE) Standards for passenger cars and light trucks by 40% to an industry average of 35 miles per gallon by 2020. SEMA worked with the automakers and other industry associations as part of the CAFE Coalition to help negotiate a compromise to the new fuel economy standard.

Under the new federal law, the amount of renewable fuel used will increase to at least 36 billion gallons. According to the EPA, the new CAFE law and renewable fuel provisions will achieve greater greenhouse gas savings than the California program. Additionally, the federal approach provides a national solution, as opposed to a potential patchwork of state rules.
Under the Clean Air Act, California may seek a waiver to establish its own air quality rules (which can then be adopted by other states). This is the first time the EPA has completely rejected a waiver request. The agency noted that previous waiver petitions covered pollutants that predominantly impacted local and regional air quality. The EPA reasoned that a national framework for addressing greenhouse gases is necessary since the emissions are global in nature and impact every state.

California intends to appeal the EPA decision. Additionally, the Supreme Court recently directed the EPA to study the problem of greenhouse gases, paving a path to for EPA to potentially recommend even more stringent regulations if, in consultation with the National Highway Traffic Safety Administration, it deems them necessary.

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