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California LCFS US

EPA receives resistance at fuel economy rallies

The Trump Administrations efforts to stop California from imposing its own air pollution standards for cars and trucks received a negative reception last week, as each of the three Environmental Protection Agency (EPA) hearings received push back and rebuke from those in attendance.

The trio of EPA-led examinations of Golden State policies, which were held in Fresno, Dearborn, and Pittsburgh, follows The Safer Affordable Fuel Efficient (SAFE) Vehicles Rule, an EPA and National Highway Traffic Safety Administration (NHTSA) joint proposal which seeks to freeze or reduce federal greenhouse gas emissions and fuel efficiency rules for cars in California, while also capping federal fuel economy requirements at the 2020 level.

Currently, fuel economy fleet averages must be at least 35-miles-per-gallon (MPG), but, under the Obama-era plan, these averages are set to rise to 50 mpg by 2025, a move which the joint proposal classifies as “no longer appropriate.”

The agencies also plan to eliminate a waiver that lets California set its own, more stringent emissions rules, rules that thirteen other states, as well as the District of Columbia, have adopted alongside the Golden State.

Of the estimated 150 participants in attendance at each hearing, notable attendees included California Air Resources Board (CARB) chair Mary Nichols and California Attorney General Xavier Becerra, who each blasted the proposed measure and vowed to fight the federal government in court if current challenges to the state persist.

“There is nothing safe about this proposal,” Nichols said, while adding that pushing back auto emissions standards would be turning a blind eye to decades of progress in cleaning up cars and trucks.

“Stop trying to interfere with the rights granted to California and other states by the constitution and the Congress,” Becerra said.

Representatives from the Alliance of Automobile Manufacturers (AAM), an association of 12 of the largest automakers and the leading advocacy group for the auto industry, concurred with CARB and the state of California, continuing to show support for maintaining the Obama-era emissions targets previously put in place.

Steven Douglas, senior director of energy and environment for the AAM, reiterated his associations preference for a single nationwide program, which would avoid costs incurred by a patchwork of different emissions standards for both automaker and customer.

While it remains to be seen, what, if any, long-term impacts the proposed emissions regulations have on the LCFS program, market participants have previously been split when discussing any possible down the line ramifications stemming from the proposed precedent.

“News is powerful, even if it never comes true,” a market participant told PRIMA, adding that the proposed regulation could have a material impact to LCFS stability and feasibility.

“No impact,” said another market participant, “this is Trump kowtowing to auto manufactures who don’t want to have to make two versions of the same vehicle, this is about auto manufacturing and having one unified 50 state mpg/tailpipe emission standard.”

Since news of the Trump-led challenge to California emissions regulations broke in late July, LCFS prices have averaged $184.30, a slightly suppressed value due largely to a credit selloff that sent prices plunging to as low as $173 in early September.

Public comments regarding the EPA and NHTSA proposal will be accepted through October 26.

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