US backtracks on its vehicle-emission targets

The American Environmental Protection Agency (EPA) has announced plans to revise its ambitious vehicle-emission targets for 2025, as set under the Obama administration. FOCUS investigates how this decision will affect the commercial-vehicle market in that country and how it could influence policy in other parts of the world.

On August 28, 2012, the Obama administration finalised and signed off standards that sought to increase fuel economy to 23,17 km/l for cars and light trucks by 2025. This ambitious move almost doubled the previous standards of the period from 2011 to 2016, set by the same administration, that sought to raise fuel efficiency by 2016 to the equivalent of 15,09 km/l.

The main reason behind this resolution was “to improve fuel economy and reduce greenhouse-gas emissions, saving consumers more than US$ 1,7 trillion at the gas pump and reducing United States (US) oil consumption by 12 billion barrels… The fuel standards represent the single most important step we’ve taken to reduce our dependence on foreign oil”, explained then US President, Barack Obama.

As a result, a number of car manufacturing companies were forced to reduce engine capacities in their new vehicles. However, on April 2, 2018, the EPA backtracked on this agreement, with the objective of revising and easing emission standards for cars and trucks.

The EPA further cited reasons such as the timeline put in place by the Obama administration being inappropriate, overoptimistic, unrealistic and setting standards too high.

According to the head of EPA, Scott Pruitt: “The regulation standards set under the Obama administration present challenges for auto manufactures, due to feasibility and practicability. It also raises potential concerns related to automobile safety and results in significant additional costs to consumers, especially low-income consumers.”

Although Pruitt stopped short of announcing new standards to replace the old ones, the decision to do away with the 23,17 km/l  standard has been a welcome relief for vehicle manufacturers, who applauded this decision.

“This was the right decision, and we support the Administration for pursuing a data-driven effort and a single national programme as it works to finalise future standards. We appreciate that the Administration is working to find a way to both increase fuel economy standards and keep new vehicles affordable to more Americans,” said Gloria Bergquist, vice president of communications and public affairs for the Alliance of Automobile Manufacturers.

American environmentalists, on the other hand, are not so impressed by the proposed rollbacks on emission standards, arguing that the decision will make American cars more expensive to fuel.

“No one in America is eager to buy a car that gets worse gas mileage and spews more pollution from its tailpipe. Designing and building cleaner, more cost-efficient cars is what helped automakers bounce back from the depths of the recession and will be key to America’s global competitiveness in the years ahead,” explained Fred Krupp, president of the Environmental Defence Fund.

Furthermore, the state of California is threatening the EPA with legal action for reneging on the agreed vehicle-emission targets set by the Obama administration. “We are ready to file suit if needed to protect these critical standards and to fight the Administration’s war on our environment,” said Xavier Becerra, attorney general of California.

In response to these concerns, Pruitt moved swiftly to explain: “The EPA will set a national standard for greenhouse-gas emissions that allows auto manufacturers to make cars that people want and can afford, while expanding environmental and safety benefits of newer cars.”

Although it is not yet clear what the long-term effects of this decision will be, should it implemented, and how it will affect the US commercial-vehicle market, the Trump administration is adamant that changing the vehicle-emission targets set by the Obama administration will create more jobs.

US President, Donald Trump, challenged General Motors, Ford Motors and Fiat Chrysler, to move their production factories to the US, rather than building cars in Mexico for the US market, in exchange for more favourable environmental regulations and tax policies.

Equally important, strict vehicle-emission targets imposed in 2012 resulted in the US commercial-vehicle market experiencing an increase in the sales figures of certain vehicle segments, while the sale of smaller vehicles declined sharply during this period. Consequently, a revision of these targets is most likely going to reverse this trend.

As vehicle manufacturing companies often make different vehicles for different global markets, the recent push to curb emissions in Europe and China could force the US to follow suit and possibly revert back to the standards of 23,17 km/l.

With car manufacturing companies pledging to convert most of their fleets to hybrid and electric technology in the coming years, the decision by the US to ease vehicle-emission targets will not be well received by the global environmental groups.

This decision could influence policies in other parts of the world to possibly revise and renege on their emission targets; resulting in a sharp decrease of the progress made so far in manufacturing fuel-efficient vehicles that produce fewer emissions and are good for the environment.