On March 20th, the Environmental Protection Agency released finalized tailpipe emission standards that will govern the auto industry from 2027 to 2032. The skillfully crafted regulations balance the interests of many stakeholders and constitute a major achievement of the Biden Administration. The EPA intends to aggressively steer road transportation away from fossil fuels while acknowledging the fact that the auto industry cannot turn on a dime. The historic regulations will reduce tailpipe carbon dioxide targets for newly sold fleets by a whopping 50%, but stringency increases will be relaxed during the first years of the program to give automakers adequate time to electrify their line-ups.
The EPA’s original proposal, published in April of 2023, was praised by environmentalists but opposed by the Alliance for Automotive Innovation (AAI), a powerful lobbying group that represents the interests of major full-line automakers. The stringency of the tentative proposal was calibrated with an optimistic assumption that two thirds of newly sold light duty vehicles could be battery electric vehicles (BEVs) by 2032. The AAI was quick to point out that the proposal’s rapidly increasing stringency levels set a blistering pace for BEV sales that exceeded ambitious goals articulated by President Biden during his first year in office. The AAI’s president and CEO, John Bozzella, characterized the proposal as being “neither reasonable nor achievable in the timeframe proved” and a “de facto BEV mandate.”
Strenuous opposition from automakers represented a major new rift with the Biden Administration, but the EPA was well positioned to accommodate their concerns. The standard rulemaking process includes a formal procedure for considering stakeholder comments, and the agency had solicited specific feedback on defined alternatives to its favored proposal. One of those alternatives provided slower stringency increases during the early years of the program but reached the same high level of stringency by 2032. This alternative ended up being adopted along with other adjustments that granted near-term flexibility to automakers. When the finalized regulations were celebrated at a Washington, D.C. ceremony, John Bozzella came to the podium to offer the AAI’s endorsement. He graciously honored the leadership of the EPA and assured the audience that the auto industry remains fully committed to electrification.
Most environmental organizations recognize the unprecedented strength of the finalized emission standards and have not criticized the modest concessions made to automakers. These groups were well represented at the elaborate ceremony, where the stage was adorned with shiny new electric vehicles. Supportive speakers from the environmental community included Amanda Leland, Executive Director of the Environmental Defense Fund, and Albert Gore, Executive Director of the Zero Emission Transportation Association. Closing remarks were delivered by White House Climate Advisor Ali Zaidi, who spoke eloquently about the power of ingenuity to provide hope as we struggle to mitigate climate change.
The EPA’s ability to hammer out an acceptable compromise on tailpipe emissions stands in stark contrast to the legislative paralysis that plagues the U.S. Congress. President Biden vowed to enact sensible, centrist policies, and his administration’s new tailpipe standards are consistent with that promise.
