General Motors, among the global leaders in the transition to EVs, did say this to AutoInformed: “GM supports economy-wide efforts to address climate change including a drive towards an all-electric future and improving the efficiency of our fleet. Complementary policies like permitting reform and support for domestic investments in manufacturing, supply chain and charging infrastructure are needed to help accelerate investments and adoption. We will review the proposal and provide comments as appropriate; and encourage coordination between the Environmental Protection Agency and the Department of Transportation.”
Stellantis also said this: “Stellantis remains committed to reducing vehicle emissions, evidenced by our continued investment of ~$35 billion in electrified propulsion technology and related software, and our U.S. product plan to deliver 25 battery-electric vehicles by 2030. While it will take some time to review today’s proposals, we are surprised that none of the alternatives align with the President’s previously announced target of 50% EVs by 2030. We look forward to a constructive dialogue with the agency as the process moves forward.”
Since President Biden took office, EV sales have tripled while the number of models on sale has doubled. There are more than 130,000 public chargers across the country – a 40% increase compared to 2020. The private sector has also committed more than $120 billion in domestic EV and battery investments since President Biden signed the Inflation Reduction Act into law.
“The new standards proposed today reflect the advancements and investments in clean vehicle manufacturing, which have been accelerated by President Biden’s Investing in America agenda and complement the ongoing transition in the market towards cleaner vehicles,” EPA said.
There Are Critics
The American Council for an Energy-Efficient Economy released the following statement from Shruti Vaidyanathan, its transportation program director, in response to updated standards: “The Biden administration has taken a major step toward tackling pollution from transportation. These proposed standards will help fight climate change, cut fueling (sic) costs, and reduce smog-forming pollution. But these standards should be strengthened to help achieve the president’s economy-wide climate goals. These are strong proposals, yet they do not give us as much progress as climate circumstances demand. We need to move to electrified vehicles as rapidly as possible while continuing to reduce emissions from conventional vehicles, and these proposals need to be improved to get us there.”
The Specialty Equipment Manufacturers Association (SEMA) noted that the U.S. Department of Energy (DOE) has proposed changes to the way it calculates the “miles per gallon equivalent” (MPGe) ratings for EVs and hybrids versus gas-powered vehicles, last updated in 2000. DOE is reassessing the energy efficiency of gasoline-powered vehicles versus EVs when taking into account the entire production and distribution system for electricity and petroleum. “For example, here are two proposed recalculations: the current Ford F-150 EV would drop from 237.7 to 67.1 mpg, and the Volkswagen ID.4 EV would drop from 380.6 to 107.4 mpg,” SEMA said.
“The MPGe calculation is incorporated into NHTSA’s Corporate Average Fuel Economy (CAFE) standards, which set mileage requirements for vehicle fleets produced by the automakers. The automakers buy credits or pay fines if they cannot meet the CAFE requirements. The reduced MPGe ratings for EVs would mean that the automakers would need to sell more EVs to help meet their CAFE fleet obligations. The NHTSA CAFE standards run parallel to the EPA greenhouse gas standards since there is an equivalence between CO2 emissions and the amount of petroleum that is burned. NHTSA is expected to soon issue proposed CAFE standards for the ’27-’31 model years,” SEMA said.
EPA Projections
- Through 2055, EPA projects that the proposed standards would avoid nearly 10 billion tons of CO2 emissions (equivalent to more than twice the total U.S. CO2 emissions in 2022). The proposed standards would reduce other harmful air pollution and lead to fewer premature deaths and serious health effects such as hospital admissions due to respiratory and cardiovascular illnesses.
- By accelerating adoption of technologies that reduce fuel and maintenance costs alongside pollution, the proposed standards would save the average consumer $12,000 over the lifetime of a light-duty vehicle, as compared to a vehicle that was not subject to the new standards.
- Together, the proposals would reduce oil imports by approximately 20 billion barrels.
- Overall, EPA estimates that the benefits of the proposed standards would exceed costs by at least $1 trillion.
Light, Medium-Duty Vehicle Proposed Standards
The first set of proposed standards announced today, the “Multi-Pollutant Emissions Standards for Model Years 2027 and Later Light-Duty and Medium Duty Vehicles,” builds on EPA’s existing emissions standards for passenger cars and light trucks for model years 2023 through 2026. The proposal retains the regulatory design of previous EPA standards for light-duty vehicles, but requires using advances in clean car technology to further reduce both climate pollution and smog- and soot-forming emissions.
Between 2027 and 2055, the total projected net benefits of the light- and medium-duty proposal range from $850 billion to $1.6 trillion. The proposal is expected to avoid 7.3 billion tons of CO2 emissions through 2055, equivalent to eliminating all greenhouse gas emissions from the entire current U.S. transportation sector for four years and would also deliver significant health benefits by reducing fine particulate matter that can cause premature death, heart attacks, respiratory and cardiovascular illnesses, aggravated asthma, and decreased lung function. EPA analysis shows that severe health impacts related to particulate matter exposure will also be reduced – including lung disorders (counting cancer), heart disease, and premature mortality.
EPA’s proposal uses a variety of “available emission control technologies.” EPA claims the standards are designed to allow manufacturers to meet the performance-based standards however works best for maker’s vehicle fleets. EPA projects that for the industry as a whole, the standards are expected to drive widespread use of filters to reduce diesel particulate matter emissions and spur greater deployment of CO2-reducing technologies for gasoline-powered vehicles.
This is sweeping, directly affecting light-duty vehicle manufacturers, independent commercial importers, alternative fuel converters, and manufacturers and converters of medium-duty vehicles ( vehicles between 8501 and 14,000 pounds gross vehicle weight rating GVWR.)
More EVs – It’s Inevitable
The proposed standards are forecast to accelerate the transition to electric vehicles. Depending on the so-called compliance pathways that manufacturers select to meet the standards, EPA projects that EVs could account for 67% of new light-duty vehicle sales and 46% of new medium-duty vehicle sales in MY 2032. The proposed MY 2032 light-duty standards are projected to result in a 56% reduction in projected fleet average greenhouse gas emissions target levels compared to the existing MY 2026 standards. The proposed MY 2032 medium-duty vehicle standards would result in a 44% reduction compared to MY 2026 standards.
Trucks Drastically Impacted
Consider that light trucks (SUVs, CUVs, vans, pickups) will be drastically affected. In 2022 the light truck market share increased another 3.4% to 79.3% – breaking 2021’s record to be the highest in history. The increase in the popularity of light trucks over cars has been solid since 2013, when only 1.2% of market share separated the two segments; by the end of 2022, the difference has grown to 59%, according to the Alliance for Automotive Innovation, and industry trade group.
Heavy-Duty Truck Proposed Standards
The second set of proposed standards announced today, the “Greenhouse Gas Standards for Heavy-Duty Vehicles – Phase 3,” would apply to heavy-duty vocational vehicles (such as delivery trucks, refuse haulers or dump trucks, public utility trucks, transit, shuttle, school buses) and trucks typically used to haul freight. These standards would complement the criteria pollutant standards for MY 2027 and beyond heavy-duty vehicles that EPA finalized in December 2022 and represent the third phase of EPA’s Clean Trucks Plan.
In short: EPA is proposing stronger CO2 standards for MY 2027 HD vehicles that go beyond the current standards that apply under the HD Phase 2 Greenhouse Gas program. EPA is also is proposing an additional set of CO2 standards for HD vehicles that would begin to apply in MY 2028, with progressively lower standards each model year through 2032. This proposed “Phase 3” greenhouse gas program uses the structure created in EPA’s Phase 2 greenhouse gas program, which EPA says is designed to reflect the diverse nature of the heavy-duty industry. As with the light- and medium-duty proposal, the heavy-duty proposal uses performance-based standards that enable manufacturers to achieve compliance efficiently based on the composition of their fleets.
The projected net benefits of the heavy-duty proposal range from $180 billion to $320 billion. The proposal is projected to avoid 1.8 billion tons of CO2 through 2055, equivalent to eliminating all greenhouse gas emissions from the entire current U.S. transportation sector for an entire year, and deliver additional health benefits by reducing other pollutants from these vehicles. The standards would result in improved air quality nationwide, and those who live near major roadways and are disproportionately exposed to vehicle pollution and heavy-duty activity, which often includes low-income populations and communities of color, would benefit most directly.
Investing in America’s Clean Transportation Future
EPA said the proposed standards align with commitments made by automakers and US states as they plan to accelerate clean vehicle technologies in the light- and medium-duty fleets in the next 10 to 15 years. Car and truck companies are moving to include electric vehicles as an integral and growing part of current and future product lines, leading to an increasing diversity of clean vehicles for consumers.
These developments are helped by what EPA calls “President Biden’s investments in America, which provide unprecedented resources to support the development and market for clean vehicle technologies and associated infrastructure and represent significant investment in expanding the manufacture, sale, and use of zero-emission vehicles. As these technologies advance, battery costs continue to decline and consumer interest in electric vehicles continues to grow. President Biden’s legislative accomplishments are also supporting critical generation of clean electricity and production of clean hydrogen needed to de-carbonize transportation.” EPA said it considered this rapid innovation in its assessment that tighter emissions standards are feasible.
EPA’s proposals will be published in the Federal Register and available for public review and comment. EPA said it will continue to engage with the public and all interested stakeholders as part of the regulatory development process. Lobbyists in pay to play Washington will be working behind the scenes.
Resources:
- Proposed Rule: Greenhouse Gas Emissions Standards for Heavy-Duty Vehicles – Phase 3
- Proposed Rule: Multi-Pollutant Emissions Standards for Model Years 2027 and Later Light-Duty and Medium-Duty Vehicles
- More information on environmental justice and transportation
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Editor’s note: Mike Spagnola is President and CEO of the Specialty Automotive Equipment Association (SEMA). His opinion follows:
“The U.S. Environmental Protection Agency (EPA) released a proposal last month for strict new federal multi-pollutant emissions standards for light- and medium-duty vehicles. The proposal would decisively tilt the U.S. car and truck market toward electric vehicles (EVs) over the next decade. The new standards would initiate for the ’27 model year and gradually increase through the ’32 model year.
“If the EPA drafts standards are implemented by 2032 as proposed, the agency anticipates that two-thirds of all new-car sales in the United States would be EVs. This large-scale shift would significantly disrupt automotive industry supply chains and potentially eliminate large numbers of jobs in vehicle manufacturing, parts production and repair shops. Ford alone estimates a 30% labor reduction in its transition to EVs
“Likewise, much of the automotive specialty-equipment market–the parts and modifications you make to your vehicle once it leaves the car lot–is built around the internal combustion engine. The $51 billion aftermarket industry supports more than one million jobs in U.S. automotive manufacturing. The automotive specialty-equipment market has also led the way in alternative fuel innovations such as hydrogen, replacing older engine technologies with newer, cleaner versions, and even conversions of older internal combustion engine-based cars to new electric, hydrogen and other alternative fuels. Yet none of that is considered part of the broader plan to reduce greenhouse gases and criteria pollutants from automobiles.
“Small businesses would be the most vulnerable to the disruptions caused by a seismic shift to battery-electric vehicles. According to the most recent Census Bureau tally of the almost 1,200 auto engine and transmission parts suppliers in the United States, more than 60% had 20 or fewer employees. These companies often make specialized components, operate on tight margins and rely on long-term contracts. They employ American workers with technical skills and create the often politically celebrated blue-collar jobs.
“Large automakers are losing billions a year in their EV programs, despite the massive financial infusion of taxpayer dollars they are receiving from the government and subsidies to purchase EVs. If they are struggling, how are small businesses expected to survive?
“Clean air and the reduction of greenhouse gases are goals everyone can acknowledge. That said, when governments arbitrarily pick technology winners and losers, the marketplace is deprived of choices and the public suffers. Instead of forcing this transition, the EPA should put in place incentives to support a diversified zero-emissions approach that takes advantage of breakthrough technologies across the spectrum.
“Hydrogen, for example, is already being used as a power source in buildings, cars, trucks, forklifts, ships and trains. Hydrogen-powered cars have greater range and faster refueling times compared to EVs and reduce the need for limited-supply materials used in EV battery packs. And clean hydrogen generation is already feasible: The National Renewable Energy Laboratory website identifies five different methods to produce hydrogen economically from sustainable resources.
“Other renewable fuels–including synthetic eFuels that allow legacy vehicles to operate in a carbon-neutral manner–should also be part of the equation. Where are the government-backed financial incentives for these alternate technologies?
“The market is rightly skeptical of new EV technology, and right now, it simply does not have the infrastructure ready to support EVs. Yet by using multi-pollutant emissions regulations to force-feed EVs to the market, the government is effectively putting all its eggs into one technology basket.
“The Biden administration should realize that the market’s hesitation to adopt EV technology in the first place proves that putting the government’s thumb on the scale is not an effective means of persuasion. But instead of adjusting course to let the market forge the transition, the administration is effectively doubling down on a flailing policy.
“Meanwhile, a dozen states have recently introduced or passed legislation or resolutions affirming support for the internal combustion engine and for the government to remain technology-neutral in the debate to reduce automotive emissions. In Virginia, for example, it was only the state’s slim Democratic Senate majority that stymied Governor Glenn Youngkin’s campaign platform issue to repeal Virginia’s internal combustion engine ban.
“The EPA’s emissions proposal is misguided and counterproductive. Instead of trying to force a clean energy transition, the Biden administration should support the work of innovators and protect the small-business owners and those they employ by letting the market and innovation drive solutions to the environmental challenges we all seek to solve.”
“We fully support the efforts to reduce greenhouse gas emissions, but actively advocate for the ability of consumers and the marketplace to choose what works best for them. There are many options on the road to zero emissions, and we feel it is crucial for government policy to remain technology neutral. The specialty automotive aftermarket business has been built around the internal combustion engine. It is also the same industry that has led the way in fuel innovations and conversions of old vehicles into new and cleaner technologies. Yet it is clear from the Biden administration’s actions and words that electrification is their technology of choice.
“This large-scale shift will significantly disrupt automotive industry supply chains and potentially eliminate large numbers of jobs in vehicle manufacturing, parts production and repair shops. We are here to support the work of small business innovators while protecting the small business owners and those they employ by letting the market and innovation drive solutions to the environmental challenges we all seek to solve.”
Mike Spagnola is SEMA President and CEO – AutoCrat.
The Environmental Protection Agency (EPA) is out with its proposed light-duty vehicle greenhouse gas (GHG) and multi-pollutant rules for model year 2027 through 2032. Immediate reaction: Two things can be true at the same time (and in this case they are).
Yes, America’s transition to an electric and low-carbon transportation future is well underway. EV and battery manufacturing is ramping up across the country because automakers have self-financed billions to expand vehicle electrification.
It’s also true that EPA’s proposed emissions plan is aggressive by any measure. By that I mean it sets automotive electrification goals in the next few years that are… very high. In fact, the proposal exceeds the administration’s own 50% electrification target (Biden Exec order 14037) announced in August 2021 – with auto industry support – by requiring more than one EV for every new gas vehicle sold by 2030 and potentially two EVs for every gas vehicle just two years later.
And it goes beyond the National Blueprint for Transportation Decarbonization – a government-wide plan rolled out recently by four cabinet agencies that doubled down on the 50% target from 2021.
To be clear, 50% was always a stretch goal and predicated on several conditions. Those included supportive policies like the manufacturing incentives in the Inflation Reduction Act (that have only just begun to be implemented) and tax credits to support EV purchases and affordability.
How will EPA justify exceeding the carefully considered and data-driven goal announced by the administration in the executive order and the more recent national blueprint? That’s a key question as the rulemaking unfolds and something to look for in the expansive proposal.
You might be thinking: “Of course the auto industry would resist going faster.”
A couple of points to consider when evaluating this rule and its ultimate feasibility:
Automakers are fully committed to an electric and low-carbon transportation future.
There are now 91 EV models on the market – across all segments and price points. Electric vehicles were 10% of new vehicles sales in December, and automakers have invested billions in U.S.-based EV and battery manufacturing. I could go on about sales and product excitement.
But EV sales momentum is only the beginning of the story. Remember this: a lot has to go right for this massive – and unprecedented – change in our automotive market and industrial base to succeed, especially as 284 million light-duty vehicles across the country (that average 12 years in age) remain on the roads. As of last year, EVs accounted for just over 1% of all light-duty vehicles.
EPA and the petroleum industry should act quickly to concurrently lower the carbon intensity of liquid fuels. This will produce higher and faster returns by reducing emissions from not only new gas vehicles (including plug-in hybrid EVs), but from the millions of light-duty gas vehicles currently on the road.
Monumental amounts of capital are being invested in zero carbon personal mobility.
One challenge: every dollar invested in internal combustion technology is a dollar not spent on zero carbon technology. And vice versa.
Why does that matter? Automakers and battery partners have already committed $110 billion in the U.S. to electrify products. Requiring self-financed investments from automakers for incremental gains from gas-powered engines comes at the expense of where our collective focus ought to be: electrification. That’s the future.
So, are EPA’s new standards feasible? Will they accelerate the EV transformation?
It depends. First, factors outside the vehicle, like charging infrastructure, supply chains, grid resiliency, the availability of low carbon fuels and critical minerals will determine whether EPA standards at these levels are achievable. Did EPA consider factors outside the vehicle when it crafted its proposal?
To some extent, the baseline policy framework for the transition has come into focus. But it remains to be seen whether the refueling infrastructure incentives and supply-side provisions of the Inflation Reduction Act, the bipartisan infrastructure law, and the CHIPS and Science Act are sufficient to support electrification at the levels envisioned by the proposed standards over the coming years.
One thing we know for sure today: IRS’s new rules for the 30D EV consumer tax credit – with stricter sourcing rules for critical mineral and battery components starting April 18 – means far fewer EV models will qualify for the $7500 purchase incentive.
Another challenge: There are 100,000 publicly available, non-proprietary charging outlets in the U.S. for three million EVs on the road. That’s a ratio of 29 EVs per charger… and not enough.
Whatever happened to a national plan?
Finally, as various government agencies – federal and state – release competing or overlapping requirements for both EV and gas-powered vehicles, we’ve got to remember to get the balance right.
About six years ago we had one national standard to reduce carbon in personal mobility, providing nationwide consumer and environmental benefits through a single, streamlined regulatory path for automakers.
EPA’s new proposal on the other hand was developed separately from the Department of Transportation’s coming Corporate Average Fuel Economy (CAFE) standards expected later this spring and not in concert with EPA.
We’re committed to constructive engagement between the regulators (EPA, DOT, DOE, California Air Resources Board) and the regulated. We also believe a successful EV transformation requires several sustained commitments: sound, realistic and consistent policy; smart regulation; and concurrent action from the non-automotive sectors of the economy – namely utilities, critical mineral mining and processing operators, infrastructure providers, and energy producers.
The question isn’t can this be done, it’s how fast can it be done, and how fast will depend almost exclusively on having the right policies and market conditions in place to achieve the shared goal of a net zero carbon automotive future.
More to say during the comment period in the weeks and months ahead…
– John Bozzella is president and CEO of Alliance for Automotive Innovation.
See also Alliance for Automotive Innovation MEMO on EPA emissions rules (April 6, 2023).