US EPA-California Tensions Over GHG Standards Increase with Preemption Challenge | frESH

dards for automobiles have been simmering since 2018, but tensions between the two sides have recently increased after California entered into a voluntary agreement on GHG standards with a group of major automakers, followed swiftly by US EPA’s withdrawal of California’s authority to enforce its own GHG standards. California has challenged the withdrawal in court. The dispute over vehicle emissions standards is likely to result in significant uncertainty for the regulated community.

The dispute over GHG standards was triggered in 2018 when US EPA announced its plan to roll back tailpipe emissions standards, which prompted California and 17 additional states to file a petition for review in the US Court of Appeals for the District of Columbia to challenge the agency action, as covered in more detail in a prior frESH post.

US EPA and the US Department of Transportation (US DOT) then published the rule, called the Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule for Model Years 2021-2026 Passenger Cars and Light Trucks (SAFE Vehicles Rule), to roll back the 2012 fuel economy standards. As part of the SAFE Vehicles Rule, the agencies additionally proposed to “withdraw the January 9, 2013 waiver of CAA preemption” for California’s programs. Negotiations between the White House and the California Air Resources Board (CARB) did not resolve the conflict.

In July 2019, CARB and four major automotive manufacturers (BMW, Volkswagen, Ford, and Honda) entered into an agreement to follow a Voluntary Framework (Framework) for GHG standards. In a press release, CARB explained that the Framework “supports continued annual reductions of vehicle greenhouse gas emissions through the 2026 model year, encourages innovation to accelerate the transition to electric vehicles, and provides industry the certainty needed to make investments and create jobs.”

Approximately two weeks later, on September 6, 2019, media reports published that the US Department of Justice (DOJ) had started an antitrust investigation into the agreement between California and the four automotive manufacturers.  Companies have already reportedly received letters from the DOJ in relation to the investigation. US EPA and US DOT on the same day sent CARB a letter cautioning that the Framework may be “inconsistent with Federal law.”

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