The proposed emissions requirements would be phased in over model years 2027 through 2032, drastically accelerating the nationwide transition to zero-emission vehicles (ZEVs) consistent with the Biden administration’s commitment to addressing global climate change and improving community air quality.
The Environmental Protection Agency (EPA) announced on April 12, 2023 a proposed rule, Multi-Pollutant Emissions Standards for Model Years 2027 and Later Light-Duty and Medium-Duty Vehicles, which included new tailpipe emission standards that are set to begin with the 2027 model year. EPA’s proposal would establish more stringent tailpipe emission standards for light- and medium-duty vehicles. [1]
According to EPA administrator Michael Regan, these rules represent “the strongest ever federal pollution standards for cars and trucks.” Commentators expect the rules to spark political debate and legal challenges regarding the federal government’s ability to set reduced greenhouse gas (GHG) emissions for fossil fuel–powered vehicles.
The Biden administration’s EPA first proposed new tailpipe emission standards for light-duty vehicles in 2021. These rules rescinded emission standards established under the Trump administration and set standards for model years 2023 and later that increased the stringency of the requirement to improve fuel economy from the 1.5% required under the Trump-era rules to nearly 10% for model year 2023, followed by approximately 5% annual increases through model year 2026.
Also in 2021, President Joseph Biden signed an executive order memorializing a goal that 50% of all new passenger cars and light trucks sold in 2030 be ZEVs, and directed EPA and the secretary of transportation to establish new emissions and fuel efficiency standards for all vehicles beginning with model year 2027 and extending to at least model year 2030.
The new emissions standards proposed by EPA would increase in stringency year over year for a six-year period, from model years 2027 through 2032. The proposed standards for light-duty automobiles aim for fleet average emissions of 82 grams/mile of CO2 in model year 2032, which represents a 56% reduction from the existing model year 2026 standards.
For medium-duty vehicles, EPA proposes an average target of 275 grams/mile of CO2 by model year 2032, representing a 44% reduction compared to the current model year 2026 standards.
Though EPA’s pollution regulations are, on their face, “technology neutral”—meaning the rules do not explicitly favor any specific fuel or engine type—the regulations are so stringent that, if adopted, automobile manufacturers will face significant challenges if they are unable to substantially increase zero-emission options.
It is estimated that under these rules, ZEVs will comprise two-thirds of new passenger vehicle sales by approximately 2032, up from approximately 6% in 2022. Medium-duty vehicles will experience a similar shift, with new zero-emission sales expected to rise to 46% by 2032. [2]
Notwithstanding the aggressive nature of the proposed standards, EPA’s proposal raises an immediate question as to whether such targets are possible within the time frame that EPA is mandating auto manufacturer compliance.
In addition, the proposal’s detailed discussion of the various federal monetary incentives provided for electric vehicles (EVs) through the Inflation Reduction Act and the Bipartisan Infrastructure Law (BIL) may give the impression that the United States currently has a robust, vibrant, and reliable public charging station network that is ready to accommodate as many EVs as manufacturers can produce.
However, a lack of readily available charging stations plagues most regions of the United States and, although BIL funding opportunities are slowly becoming available, that is a five-year process that will still be ongoing when the EPA standards are to take effect.
BIL funds are intended to support development of only 500,000 public chargers, which is substantially below what many analysts estimate the United States will require to accommodate widescale and aggressive EV deployment. And, once developed, issues still remain concerning the reliability of those stations as well as the commercial success of those in a world where utility demand charges threaten the economics of such projects.
Commentators expect significant opposition from certain members of Congress, state attorneys general, automotive groups, and other key stakeholders. Once the proposed rules are published in the Federal Register, there will be opportunities to provide public comment. Interested parties should continue to monitor the status of EPA’s proposed tailpipe emissions standards and any potential future changes, as EPA will soon announce information regarding a public hearing for the proposal.
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[1] While not the focus of this LawFlash, EPA has also proposed new emission standards for heavy-duty vehicles starting in model year 2028.
[2] In addition to emission standards pushing the industry toward ZEVs, the EPA proposal also includes certain revisions to EPA’s GHG program; standards for controlling refueling emissions from incomplete medium-duty vehicles (e.g., partially complete vehicles that require further manufacturing to become completed per CFR § 567.3); requirements for battery durability and warranties on certain plug-in electric vehicles; and amendments to certain program requirements related to aftermarket fuel conversions, importing vehicles/engines, evaporative emission test procedures, and test fuel specifications for measuring fuel economy.