CEI comments on NHTSA’s proposed Corporate Average Fuel Economy Standards
Thank you for the opportunity to comment on the National Highway Traffic Safety Administration’s (NHTSA’s) proposed corporate average fuel economy (CAFE) standards for passenger cars and light trucks for model years (MY) 2027–2032.[i]
These comments provide a contextual analysis of NHTSA’s proposal. Specifically, NHTSA’s proposal is examined in relation to the Environmental Protection Agency’s (EPA’s) May 5, 2023 proposed motor vehicle greenhouse gas (GHG) emission standards, prior joint rulemakings by the two agencies, West Virginia v. EPA (2022), Massachusetts v. EPA (2007), and various provisions of the Energy Policy and Conservation Act (EPCA) as amended.
The analysis reveals that the EPA and NHTSA propose to destroy what the Obama administration once proudly hailed as the harmonized, consistent, coordinated, national fuel economy and greenhouse gas vehicle program. More importantly, it reveals that the both agencies are engaged in a regulatory campaign of vehicle electrification that is unlawful on both major-questions and statutory grounds.
I. Summary
The agencies’ standards are inconsistent in two ways. First, the EPA’s tailpipe GHG standards start out 8.5 percent more stringent than NHTSA’s CAFE standards, and end up 44.8 percent more stringent.
However, all of the fuel economy gains from EPA’s standards come from rising electric vehicle (EV) sales, not from improved fuel economy in the shrinking internal combustion engine (ICE) vehicle segments of automakers’ fleets.
For ICE vehicles, NHTSA’s CAFE standards are significantly more stringent than the EPA’s. That is the second inconsistency.
The standards are coordinated but after the fashion of a squeeze play or one-two punch. Because NHTSA’s standards are more stringent for ICE vehicles, manufacturers do not automatically meet those standards by complying with the EPA’s more-stringent fleetwide GHG standards.
Thus, NHTSA’s standards ensure that manufacturers have two compliance headaches as long as they continue to produce ICE vehicles. Some companies may withdraw from the ICE vehicle market, or accelerate plans to do so, in order to simplify and reduce overall compliance burdens. Functionally, NHTSA is a power booster or auxiliary enforcer for the electrification agenda.
Unlawful on major-questions grounds
Although less stringent than the EPA’s GHG standards, NHTSA’s CAFE standards are stringent enough to backstop the administration’s electrification agenda if EPA and California lose in court.
Forced vehicle electrification is a policy decision of vast economic and political significance for which no clear congressional authorization exists. The agencies’ agenda is thus unlawful under the Supreme Court’s major-questions doctrine as articulated in West Virginia v. EPA.
Unlawful on statutory grounds
EPCA as amended prohibits NHTSA from setting fuel economy standards to force sales of alternative fueled vehicles such as EVs. NHTSA’s role as a power booster for vehicle electrification conflicts with EPCA’s statutory prohibition.
Undermining the Supreme Court’s rationales in Massachusetts v. EPA
In Massachusetts, the Supreme Court opined “there is no reason to think the two agencies cannot … avoid inconsistency” if the EPA prescribes CAFE-like GHG standards, and that such power would not lead to “extreme measures,” such as banning an entire class of products. Yet the agencies’ proposed standards are increasingly inconsistent and aim to phase out (progressively ban) sales of ICE vehicles. The agencies undermine key premises on which the Court based its decision.
The agencies have unlawfully empowered California to ban ICE vehicles
The agencies depict their role as supporting rather than driving vehicle electrification, assigning primary responsibility to California’s zero-emission vehicles (ZEV) program. However, the ZEV program would not exist had the EPA not waived Clean Air Act preemption of California’s GHG emission standards in 2009 and Advanced Clean Car (ACC) program in 2013, and 2022, and had NHTSA in 2022 not repealed the SAFE 1 Rule enforcing EPCA preemption of state policies “related to” fuel economy standards.
NHTSA ignores or downplays important aspects of economic practicability
Millions of middle-income households are already priced out of the market for new motor vehicles. NHTSA’s standards will increase new-car prices. Americans’ choices under the agencies’ proposals will be increasingly limited to purchasing EVs many cannot afford or do not want, or giving up on personal automobility altogether. Households forced to rely on transit will experience significant losses of personal liberty, time, convenience, economic opportunity, health, safety, and, yes, fun.
Climate change is not a crisis, and the proposed CAFE standards are not a solution
Contrary to Biden administration assertions, climate change is not a crisis, and the global warming mitigation achieved by the proposed CAFE standards would orders of magnitude smaller than scientists can detect or verify.
Bottom line
The agencies’ proposed motor vehicle standards are unlawful and unreasonable, and should be withdrawn.
II. Inconsistent fleetwide standards
The misalignment between NHTSA’s CAFE standards and the EPA’s tailpipe GHG standards is a fundamental departure from the agencies’ practice in both the Obama and Trump administrations. The agencies’ joint rulemakings in 2010, 2012, 2016, and 2020 promulgated CAFE and GHG standards of approximately equal stringency. That was considered the only rational approach. As the 2010 rule explained, CO2 emissions constitute about 94 percent of motor vehicle GHG emissions, and a vehicle’s CO2 emissions per mile are directly proportional to its fuel consumption per mile.[ii]
Although labeled differently, tailpipe CO2 emissions and fuel economy are “two sides of the same coin.”[iii] NHTSA’s CAFE standards (expressed in miles per gallon) implicitly regulate fleet average CO2 emissions per mile, and the EPA’s GHG standards (expressed in grams CO2/mile) implicitly regulate fleet average fuel economy. It is neither efficient nor reasonable to subject automakers to conflicting fuel economy requirements.
Accordingly, in the 2010 and 2012 joint rulemakings, the agencies boasted of implementing a single “national,” “harmonized,” “coordinated,” and “consistent” CAFE and GHG program. Not once, or twice, but scores of times. In the 2010 rule establishing CAFE and GHG standards for MY 2012-2016 motor vehicles, the term “national program” occurs 91 times; “harmonized,” 26 times; “coordinated,” 21 times; and “consistent,” 148 times. In the 2012 rule establishing CAFE and GHG standards for MY 2017-2025 motor vehicles,[iv] the term “national program” occurs 111 times; “harmonized,” 28 times; “coordinated,” 33 times; and “consistent,” 253 times.
In May 2023, the EPA proposed GHG standards for MY 2027-2032 light duty vehicles.[v] The EPA’s proposed standards are substantially more stringent than NHTSA’s. In NHTSA’s preferred alternative, abbreviated PC2LT4, required fleet average fuel economy increases by two percent annually for passenger cars and four percent annually for light trucks.[vi]
