Policy Brief:
TheSaferAffordableFuel-Ef2icient(SAFE)VehiclesRule
RevokingCalifornia’sWaiverandImpactsonElectricVehicle(EV)Deployment
September 2018
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Policy Brief: TheSaferAffordableFuel-Ef2icient(SAFE)VehiclesRule
Introduction InAugust,theU.S.EnvironmentalProtectionAgency(EPA)andtheU.S.DepartmentofTransportation’sNationalHighwayTrafEicSafetyAdministration(NHTSA)unveiledjointproposedrule-makingtorevisetailpipeemissionstandardsandaveragefueleconomystandardsforcarsandlight-dutytrucksmanufacturedformodelyears2021-2026.ThisannouncementcreatedaconfrontationwithCaliforniaandraisedquestionsaboutwhetherEPAhastheauthoritytorevokeCalifornia’swaiver–whichtheydidintheproposedrule–underthecircumstances,andwhetheritsbettertoforgeacompromisebothgovernmentscanlivewith.
Backin2012,EPAandtheNHTSAEinalizedstandardsrequiringautomobilemanufacturerstoaverage54.5milespergallon-equivalentacrossnewvehicleEleetsby2025.Thisstandardisroughlyequivalentto36milespergalloninreal-worlddriving.Followingitsreviewofthesestandards,EPAhaddeterminedtheyareunwarrantedandinconjunctionwithNHTSA,proposedtolowerthemconsistentwith2020levelsandlocktheminplaceuntil2026givenconcernsbyautomobilemanufacturersthatthestandardswereinfeasible,evenwithrosyassumptionsabout
hybrid,plug-inelectric,andfuelcellvehiclemarketpenetration.
EPA,asdiscussedmorefullybelow,facedasigniEicantoppositionfromCalifornia,whichhistoricallyenjoyedtheauthoritytosetitsownfuelefEiciencystandardsforvehicles,andfromenvironmentalgroupsEiercelyopposedtoanymovebytheTrumpAdministrationtomodifyObama-eraregulations.CaliforniaandotherstatesmadeitwellknowntheyplannedtosuetoblockEPAandNHTSA’sruleintheinstanceofEinalized.
EPA Review is Legally Required Despitecertainpresscoverage,thiswasnotasimplecaseofregulatoryrollback.AspartofthestandardsEinalizedin2012,EPAwasrequiredtoconducta“mid-term”reviewofthestandardsformodelyears2022-2025giventhatthosestandardsweresetmorethanadecadeinadvance.
Backthen,automakerswereconcernedoverthelackofreliableprojectionsforthecostandtheavailabilityoftechnologiesneededtomeetthesestandards.TheAllianceofAutomobileManufacturershadsaidnoconventionalvehicletodaycanmeetthestandardsaswritten.Some
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hybrids,plug-inelectric,andfuelcellvehiclescan,buttheycomprisefewerthan3.5percentofnewvehicles.
Inotherwords:thisreviewwaslong-plannedandwaslegallyrequired,andmanybelievedtheObamaAdministrationrushedtocompleteitsversionofthereviewinitsEinaldayswithoutcoordinatingproperlyacrossagenciesandconsideringthevoluminoustechnicalrecordithadcompiled.
Indeed,priortothe2016presidentialelection,inJuly,EPA,NHTSA,andtheCaliforniaAirResourcesBoard(CARB)jointlypreparedadrafttechnicalassessmentexaminingthefeasibilityofthestandards.Theassessmentfoundautomakerscouldmeetthestandardsatareasonablecost(automakersgenerallydisagreedandhavesinceobjected).
EPAthenindicateditwouldcompleteitsmid-termreviewandissueitsdeterminationonwhetherthestandardsshouldbemodiEiedbythemiddleof2017–aprocessthatwouldinvolveNHTSAandCARB.
ButonNovember30,2016,afewweeksafterDonaldTrumpwaselectedpresident,EPAchangedcourseand,unilaterally,releasedadraftdeterminationsayingthestandardsfor2022-2025shouldremainastheyare.TheagencyspedthroughanabbreviatedperiodforpubliccommentandthenEinalized
itsdetermination,unchangedfromitsproposal,onJanuary13,2017.
Notably,NHTSAandCARBdidnottakepartinthisreview.InMarch2017,theTrumpAdministrationperformedthelegallyrequiredreview,whichultimatelyledtotheSAFEVehiclesRuleproposal,includingrevocationofCalifornia’swaiver. Impacts on EV Deployment LegalprognosticatorsareallovertheboardonhowEPA/NHTSA’sproposaltorevokeCalifornia’swaiverwillplayoutinthecourts.However,assumingtherulestood,therewerewidelydivergentviewsonhowthatwouldimpactEVdeploymentintheUnitedStates.Asalegalmatter,itwouldblocksomeofCalifornia’smoststringentvehicleemissionsgoals,butasapracticalmatter,somesayyoucan’tputthetoothpastebackinthetube,sotospeak.
TheSAFEVehiclesRulewouldineffectpre-emptCalifornia’sZeroEmissionsVehicle(ZEV)mandate.ThismandateiscreditedwithmuchoftheEVgrowthinCaliforniaandotherstateswho’vechosentoadopttheCaliforniastandard.MorespeciEically,theZEVprogramrequiresautomakerstosellelectriccarsandtrucks inCaliforniaandnineotherstates(Connecticut,Maine,Maryland,Massachusetts,NewJersey,NewYork,Oregon,RhodeIsland,andVermont).
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Theexactnumberofvehiclesislinkedtotheautomaker’soverallsaleswithinthestate.
Theprogram’sinitialobjectivewastoensurethatautomakersresearch,develop,andmarketEVs,whichgeneratefeweremissionsthanvehiclespoweredwithinternalcombustionengines.Bydirectlyrequiringthatautomakersinvestincleantechnology,theZEVprogramwasconsideredadrivingforcebehindanexpandingmarketwithacurrentofferofover30zeroemissionmodelsavailabletotheU.S.public.
Programcomplianceishighlytechnical,buttheprogramisoneoftheprimaryreasonsCaliforniaissettoexceeditsgoalof1.5millionEVsontheroadby2025andisconsideredwithinstrikingdistanceofthestate’smoreambitiousgoalof5millionEVsontheroadby2030.Iftheprogramwerepre-emptedalongwithsimilarprogramsinnineotherstates,itseasytoseewhyEVadvocateswereconcernedabouthowtheSAFEVehiclesRulewouldstiEleEVdeploymentprogress.
Ontheotherhand,freemarketproponentshavepointedoutthatifEVsareabetteroption,theywon’trequireamandatetoimprovetheirpopularity.And,theTrumpAdministrationhaspointedoutthatanentirecountryofdriversshouldn’tbeforcedtosubsidizeaspeciEicstate’spolicypreference.Aswithallthings,thefulltruthisprobablysomewhereinbetween.
But,manyEVadvocatesandtechnicalanalystshavebeguntobelievethatEVswillcatchanddeploymorequicklyregardlessofmandates.
Forexample,anICFreportreleasedin2018arguedthatotherpolicyleversandinternationaltrendsmaymakeCAFEstandardsamootpoint.Thereportexplicitlystates,“The[EPA’s]about-faceisnotlikelytohaveanappreciableimpactonthelong-termtransformationthatisalreadyunderway.”ICFtechnicaldirectorPhilSheehywentasfarassaying,“ThecatisoutofthebagonelectriEication.There’sjustnotalotthatyoucandotoundowhat’salreadybeendonethere.”
Tobesure,automakershavebeeninvestingheavilyinEVbatteryR&DandutilitiesareworkingwithEVserviceproviderstoexpandEVcharginginfrastructureavailability.
The Alliance for Innovation and Infrastructure (Aii) consists of two non-profit organizations, The National Infrastructure Safety Foundation (NISF) a 501(c)(4), and the Public Institute for Facility Safety (PIFS) a 501(c)(3). The Foundation and the Institute focus on non-partisan policy issues and are governed by separate volunteer boards working in conjunction with the Alliance’s own volunteer Advisory Council.
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