SEMA eNews Vol. 12, No. 26, July 2, 2009

EPA Grants California Greenhouse Gas Waiver

The U.S. Environmental Protection Agency (EPA) announced that it will grant a waiver to California to allow the state to regulate greenhouse gas emissions from cars and trucks. Until at least 2016 however, California will pursue the national approach adopted by the Obama Administration. The decision ends a seven-year battle by California to establish standards to limit emissions of carbon dioxide and other greenhouse gases.

In May, the Obama Administration announced that it would set tough, new fuel-economy standards for model year 2012-2016 cars/trucks, and simultaneously reduce carbon dioxide (CO2) emissions through a national standard. The decision ended years of debate between California, the federal government and the automakers.

Fuel economy and CO2 emissions are directly related since CO2 is released in proportion to the amount of carbon-based fuel that is burned. In 2007, the Bush Administration blocked implementation of the California CO2 rule which had been adopted by 13 other states.

The National Highway Traffic Safety Administration (NHTSA) will set Corporate Average Fuel Economy (CAFE) standards for MY 2012-2016 vehicles that nearly match CO2 emission standards adopted by California. The EPA will also establish corresponding CO2 emissions standards using its authority under the Clean Air Act. The average CAFE rating will be 35.5 mpg in 2016, based on a combined 39 mpg rating for passenger cars and 30 mpg for light trucks. The EPA will set a CO2 emissions standard of 250 grams per mile for vehicles sold in 2016, roughly equivalent to 35.5 mpg.

Since the federal standards will not begin until 2012, the waiver technically allows California and other states to enforce their own standards. More importantly, the waiver will permit California to pursue stricter standards after 2016.

For details, contact Stuart Gosswein.

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