A handful of states have banded together to sue the Trump Administration for delaying financial penalties associated with automakers’ inability to meet minimum fuel economy standards. As part of the president’s deregulation proposals, the National Highway Traffic Safety Administration has placed Obama-era mandates on review as regulators debate whether to grant automakers significant reductions in fuel economy requirements.
However, those changes have yet to arrive, meaning the industry is still under pre-existing standards — and some states want automakers held accountable. California, New York, Vermont, Maryland, and Pennsylvania want the current administration to introduce its proposed quotas or enforce the already established 2016 limits.
Having reviewed a copy of the suit ahead of its filing in the U.S. Court of Appeals, Reuters notes that the states and three environmental groups are jointly challenging the National Highway Traffic Safety Administration’s July decision to suspend a 2016 directive that more than doubled penalties.
In 2015, Congress ordered federal agencies to adjust civil penalties to account for inflation. In response, the NHTSA proposed to raise fines from $5.50 to $14 for every 0.1 mile per gallon of fuel that newly built vehicles consume in excess of Corporate Average Fuel Economy (CAFE) standards.
“State attorneys general have made clear: we won’t hesitate to act when those we serve are put at risk,” New York Attorney General Eric Schneiderman said in an official statement.
Automakers immediately protested the hike, claiming it could increase industry compliance costs by around $1 billion annually. Likewise, chief executives of 18 carmakers issued memorandums to both the president and Trump-appointed EPA administrator Scott Pruitt at the start of this year. The letters urged officials to relax efficiency and emissions standards, despite manufactures having already agreed to the previous terms while Obama was in office.
In March, Trump ordered a comprehensive review of the vehicle fuel efficiency standards from 2022 through 2025, saying they were too strict and might handicap productivity.
The NHTSA said in July that many automakers were already falling behind the current fuel economy standards and could be faced with “the possibility of paying larger CAFE penalties over the next several years.” While it cited that figure as $30 million in annual civil penalties, automakers claim it could be much higher. Automakers have also mentioned the possibility of increased costs to consumers and a production decline that could end up “putting hundreds of thousands and perhaps as many a million jobs at risk.”
It’s hard to know which group to listen to — each has its own agenda to push in the gasoline fight. The Obama administration wanted an environmental victory, Trump wants a business win, states want a well-stocked U.S. Treasury, and automakers want to remain as profitable as possible with minimal oversight.
Of course, the backdrop to all of this is doing what’s best for the planet.
California Attorney General Xavier Becerra said in a statement that gas-sipping cars mean “cleaner air, better overall health for our children, and savings at the pump… We will hold the Trump Administration accountable.”
The litigants’ fear is that companies won’t bother with emissions without government intervention. Conservatives say over-regulation is detrimental to the health of the automotive industry. Meanwhile, Liberals are convinced business will take advantage of the environment the second efficiency standards are rolled back.
To play devil’s advocate, I’ll remind everyone (for the third time this week) that practical fuel economy hasn’t changed since 2014. Meanwhile, the public hasn’t embraced ultra-green vehicles to the degree proponents hoped for. But more than 700,000 jobs have been added in the automotive sector since the government bailed out the auto industry, and plenty of them are due to parts suppliers focusing on efficient vehicle technologies.
[Image: Paramount Pictures]