EPA to regulate GHG emissions from vehicles

By Holly Jessen | March 16, 2010
Posted April 1, 2010

In its first-ever official action regulating greenhouse gas (GHG) emissions, the U.S. EPA and the Department of Transportation's National Highway Traffic Safety Administration (NHTSA) announced a program to regulate light duty vehicles.

The joint final rule was discussed during a press conference call April 1 and will apply to vehicles model years 2012 through 2016, specifically all passenger cars, light-duty trucks, and medium-duty passenger vehicles. The vehicles must achieve average fleet wide economy standards of 35.5 mpg by 2016.

The changes will come at a cost of $53 billion to automakers. However, EPA's Administrator Lisa P. Jackson pointed out the net benefit was estimated at $190 billion due to reduced gasoline use and lower emissions. She also mentioned health benefits, specifically for her son, who suffers from asthma.

Consumers will see a $985 increase in vehicle prices by 2016. Vehicle owners will get that back in an average of three years due to increased fuel efficiencies, Jackson said, sooner when the vehicle is purchased on an extended payment plan. A consumer that purchases a 2016 vehicle should save the average buyer $3,000 during the life of the car, the EPA said.

The regulations establish one single federal standard for light duty vehicles, rather than a patchwork of state standards. Vehicles will be required to meet an estimated combined average emission level of 250 grams of CO2 per mile, or 35.5 mpg. The standards will cut GHG emissions by about 960 million metric tons. It will also cut consumption of oil by 1.8 billion barrels over the lifetime of the vehicles sold with model years of 2012 to 2016.

The 35.5 mpg figure will be reached if the industry were to meet CO2 reduction levels solely through fuel economy improvements. The EPA regulation allows automakers to use air conditioning credits to meet part of the requirements for 2012-2016 model years, while the NHTSA does not. The regulations also allow automakers to continue to get credits for making flex fuel vehicles that run on E85 until 2015, after which it must be shown that the fuel is being utilized.

The Alliance of Automobile Manufacturers has said it is on board with the new regulations. The group, which represents Detroit's Big Three, Toyota Motor Corp. and seven other automakers, said it will result in a 30 percent decrease in CO2 emissions and a 40 percent increase in fuel economy. "The regulations provide manufacturers with a roadmap for meeting significant mileage increases for model years 2012-2016, as well as the certainty and lead time necessary to cost effectively add new technology," the group said in a news release. However, the Alliance is also pushing for regulations for 2017 and beyond.

In a question and answer session held at the end of the news conference many reporters asked about the tailoring rule for regulating GHG emissions from stationary sources. The EPA has repeatedly stated that it has no plans of regulating emissions from stationary sources until 2011. "Nothing is happening today except we are announcing wonderful rules on cars," Jackson said.

She repeatedly stated that the sky wasn't falling and Armageddon wasn't coming because these GHG regulations were announced. The agency planned to introduce regulations for regulating stationary sources in a thoughtful way that doesn't "turn the economy on its ear," moving slowly and deliberately so states and the EPA are ready when the regulations are announced. Starting in 2011, a small number of stationary sources of GHG emissions, which are already required to obtain permits, will be regulated. "We believe that there is a need to phase in regulations," she said.

The EPA is working very hard on the tailoring rule, Jackson added, but had no specific date to announce when those regulations would be finalized. It does, however, need to come as soon as possible.

When asked if the deliberate approach would give Congress time to come up with its own legislation, she said the EPA was trying to be mindful of what legislators are working on. "Certainly nobody is wishing more than me for a legislative answer," she said.

For more information, see the EPA's regulations and standards page for controlling GHG emissions from mobile sources.