EPA To Scrap Fuel Efficiency Rules

The U.S. Environmental Protection Agency (EPA) is expected to announce in the coming days that it will be rolling back the fuel economy targets for cars and SUVs-a move that could be welcomed by car manufacturers, but that could also send the Administration toward a legal clash with California, which has vowed not to back down on fuel efficiency standards.

EPA Administrator Scott Pruitt has already sent a 16-page draft of the plan to the White House for approval, The New York Times reported on Thursday, quoting an EPA spokeswoman.

"The result will be more gas-guzzling vehicles on the road, greater total gasoline consumption, and a significant increase in carbon dioxide emissions," Robert Stavins, director of the Harvard environmental economics program, told the NYT.

Pruitt is expected to present the rolling back of the fuel efficiency standards as removing a regulatory burden on car manufacturers that would help them to offer more affordable SUVs, trucks, and vans, people familiar with the proposal told the NYT.

But California, which prides itself on imposing strict environmental rules and which has the fuel economy standards as the basis of its own climate goals, is ready to fight weaker federal environmental standards and fuel economy rules. California has a special waiver under the Clean Air Act to enact stricter rules than those at federal level.

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"We're prepared to take whatever action, legal or otherwise, that we must to protect our economy, our environment, and the public health of people of California," California Attorney General Xavier Becerra said.

The automakers, on the other hand, say they are not asking for a rollback and they still hope that a California-vs-Administration clash can be avoided.

"We support increasing clean car standards through 2025 and are not asking for a rollback. We want one set of standards nationally, along with additional flexibility to help us provide more affordable options for our customers. We believe that working together with EPA, NHTSA and California, we can deliver on this standard," Ford Motor Company's Executive Chairman Bill Ford and President and CEO Jim Hackett wrote in a blog post earlier this week.

By Tsvetana Paraskova for Oilprice.com

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