The new U.S. vehicle emissions standards proposed Wednesday by the Environmental Protection Agency could become the most consequential part of President Joe Biden’s climate legacy—avoiding nearly 10 billion tons of carbon dioxide pollution through 2055.
That would be the equivalent of dialing down the entire U.S. economy to zero CO2 emissions for two years.
But to fulfill the promise of the strongest-ever pollution standards proposed for cars and trucks, the Biden administration is relying on both automakers and consumers to embrace the electric vehicle revolution.
Within a decade, two-thirds of passenger cars, half of freight delivery vehicles and a quarter of heavy trucks purchased would be electric under the plan. In 2022, EVs accounted for just 7 percent of vehicle sales.
Administration officials believe that the goal is reachable thanks in part due to historic multi-billion dollar investments that both the federal government and the auto industry are making in the wake of the clean energy spending bills by Congress, including last year’s Inflation Reduction Act.
“This is a moment of transformation,” said White House Climate Advisor Ali Zaidi in a briefing with reporters. “It’s a moment of transformation that accrues to the benefit of our kids, who rely on us to make decisions so that they can breathe cleaner air. It benefits our energy security because…we will be less reliant on imports from foreign countries. And it’s a huge boon to investing in America.”
But the oil industry may well challenge the effort, backed by fossil-fuel reliant states that have led past lawsuits against climate regulations. “This deeply flawed proposal is a major step toward a ban on the vehicles Americans rely on,” said Mike Sommers, president and CEO of the American Petroleum Institute. “As proposed, this rule will hurt consumers with higher costs and greater reliance on unstable foreign supply chains.”
Driving Down Oil Demand
As U.S. electricity has become cleaner because of the shift away from coal and to cheaper natural gas and renewable energy, transportation has overtaken the power sector as the largest source of U.S. greenhouse gas emissions. And though the Biden administration has taken heat for its slow pace of rolling out regulations to further curb power sector emissions, the new vehicle standards could mean far more in reducing the nation’s greenhouse gas footprint.
The vehicle standards could also minimize or eliminate the eventual impact of recent pro-oil development decisions that Biden has made—like the approval of ConocoPhillips’ massive Willow project in the Arctic or the recent big lease sale in the Gulf of Mexico, with oil the source of nearly all transportation emissions. If U.S. demand for oil collapses, so would the economic viability of high-priced oil projects.
Environmental groups that had blasted the administration’s approval of Willow as a decision that would lock in greenhouse gas emissions for decades praised the approach that the Biden EPA took to spur a move away from gasoline-powered transport.
“The EPA clean air proposals announced today will slash billions of tons of climate pollution, along with health-harming pollution that causes thousands of premature deaths annually,” said Fred Krupp, president of Environmental Defense Fund, in a statement. “EPA has launched us on a critically important journey to a clean transportation future.”
The success of the effort will hinge somewhat on the mix of vehicles that Americans buy in the years ahead, but the EPA concluded that the sizes of passenger vehicles won’t be as big of an issue as it was in the past. Even large SUVs can have zero emissions if they are powered by batteries instead of internal combustion engines, the EPA reasoned.
Because of the EPA’s practice of setting different, more lenient standards for light trucks than for smaller passenger vehicles, previous vehicle greenhouse gas regulations did not drive down emissions as quickly as projected.
For example, when President Barack Obama put the first vehicle GHG emissions standards into effect in 2012, 64 percent of new vehicle sales were classified as passenger vehicles, with the remaining 36 percent of sales being light trucks, such as pick-ups. Those shares have completely reversed, with light trucks now accounting for 63 percent of new sales, and passenger vehicles, for 37 percent of sales. Traditional sedans now represent just 26 percent of fleet sales, replaced by taller and heavier vehicles like sport utility vehicles and crossover, or “car SUVs,” with lower fuel economy ratings, more lenient emissions standards and more greenhouse gas emissions per mile driven.
These larger vehicles are far more profitable for automakers than sedans, and the manufacturers say it’s what consumers want. Some environmental advocates have called for EPA to abandon separate standards for cars and SUVs.
“These and other loopholes make Swiss cheese out of a solid regulation and must be rejected,” said Dan Becker, director of the Safe Climate Transport Campaign at the Center for Biological Diversity.
But instead of eliminating the differing standards for cars and SUVs, EPA proposed to phase the difference down over time. It will be easier for manufacturers to meet more stringent standards for larger vehicles as more of them are powered by battery, the agency concluded. Automakers would be required to reduce fleet-wide emissions from cars 52 percent from Model Year 2026 to Model Year 2032, to 73 grams of CO2 per mile.
For light trucks, they would have to achieve a 57 percent reduction, to 89 grams of CO2 per mile. The EPA anticipates that the fleet-wide average reduction would be 56 percent, to 82 grams per mile.
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The auto manufacturers signaled they are committed to an EV future, but they want to see changes in the proposal. They will push for the Biden administration to amend the plan to allow for a more gradual transition.
“The question isn’t can this be done, it’s how fast can it be done,” said John Bozzella, president and CEO of the Alliance for Automotive Innovation, which represents the vast majority of manufacturers selling in the U.S. market. “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.”
Will Consumers Go Electric?
The Biden EPA is counting on a significant increase in consumer EV interest. A 2022 survey by Consumer Reports showed that about one-third of Americans would either seriously consider or definitely buy or lease an EV today, if they were in the market for a new vehicle.
“This share is likely to rapidly grow as familiarity increases in response to increasing numbers of [battery electric vehicles] on the road and growing visibility of charging infrastructure,” the EPA said in the rationale for its new rules.
The agency projects that average vehicle production costs for Model Year 2032 cars would be $1,200 more than they would have been without the regulations. But the agency said that the new federal incentives—up to $7,500 for new EVs and $4,000 for used EVs—will help make electric drive affordable. EPA is also counting on consumers understanding and accepting that the higher purchase price will more than offset by a $9,000 reduction in fuel and maintenance costs over eight years of ownership.
Nevertheless, foes of the new vehicle standards have signaled they will frame them as an expensive move that will limit consumer options.
“The ‘electrification of everything’ is not a solution,” said Sen. John Barrasso (R-Wyo.) in a prepared statement. “It’s a road to higher prices and fewer choices.”
Such arguments may hold sway with fellow Republicans, a new Gallup poll suggests. It shows that 76 percent of Democrats either owned or were considering purchasing an EV, while 71 percent of Republicans said they would not buy one.
But the Biden administration is counting on the EV transition to be an economic boon too big for residents of red states to ignore. Eight of the 12 states sharing $2.8 billion in federal grants for battery and raw material production voted for former President Donald Trump. And tracking by an industry group, the Zero Emission Transportation Association, shows that half of the 10 states gaining the largest portions of more than $1 trillion in private EV investments were Trump states.
The EPA will be gathering public comment over the next 60 days, including in hearings in early May, before finalizing the proposal. Administrator Michael Regan has vowed to work with environmentalists and the auto industry to ensure the new standards are both achievable and effective in cutting greenhouse gas emissions.
“We’re going to envision and innovate and achieve this future together,” Regan said.