White House, carmakers near deal on fuel standards
The White House is nearing compromise with automakers on tougher fuel standards for cars and trucks, after talks in which the industry lobbied for a slower pace of efficiency requirements for their most popular passenger trucks.
The Obama administration is preparing to require that automakers’ vehicle fleets average 54.5 miles per gallon by 2025, according to people with knowledge of the talks, who spoke on condition of anonymity because they were not authorized to do so publicly.
For weeks, stakeholders in talks for new fuel efficiency standards from 2017 to 2025 said the White House had sought a fleetwide average of 56.2 mpg. The administration can issue the new requirements without industry consent, but opted to negotiate to increase industry buy-in.
The slightly lower target signals that the White House and carmakers have come to terms on the most significant sticking point: fuel efficiency goals for light trucks, a category that also includes SUVs, minivans and full-size pickups, which remain the country’s best-selling vehicles.
Actual mileage would be lower, around 50 mpg by 2025, because of exemptions and credits that would probably be granted.
Nonetheless, the 2025 goal marks a sharp increase for the U.S. auto fleet, which now averages about 27.8 mpg. The fleet average is mandated to climb to about 34.1 mpg by 2016.
Ford and GM reportedly support the new standards, Chrysler less so, said people close to the talks. The difference, one participant said, is that Ford and GM have made more significant strides in fuel efficiency technology than Chrysler, making it easier for them to attain the 2025 standard.
The proposed standard is still higher than many automakers want, but one administration official said Tuesday there were signs that some companies may agree to it.
“We’re encouraged by the strong positive feedback we’re receiving from several companies,” said the administration official, who requested anonymity to discuss the private talks. The official did not identify companies who may have signed onto or signaled support for the new figures.
The official said the White House hopes it can soon announce a standard agreed upon by carmakers, the United Auto Workers union, environmentalists and California officials.
Until recently, light trucks have been the biggest moneymakers for Detroit’s Big Three, in part because a long-standing loophole allowed them to build the vehicles without the more costly fuel efficiency equipment on cars. Automakers have been reluctant to boost the price of light trucks and have said they need a longer lead time to develop technology to improve truck mileage.
The new proposal gives makers of light trucks more time but demands they pick up the pace of improvement by 2022. The proposed agreement would have automakers reduce greenhouse gas emissions from light trucks by 3.5% annually from 2017 to 2021, a move that essentially raises mileage, said people close to the talks.
From 2022 to 2025, the auto manufacturers would have to decrease truck emissions by 5% annually. By contrast, cars have to decrease emissions by 5% every year from the outset.
Automakers struck a conciliatory tone.
“Automakers are continuing to press for fuel economy increases that don’t jeopardize vehicle choice or jobs,” said Gloria Bergquist, vice president for communications at the Alliance of Automobile Manufacturers, the industry’s main lobbyist. “We believe the White House hears us.”
The California Air Resources Board, which has authority under the Clean Air Act to set its own automotive standards, welcomed news of the 54.5-mpg target. “While the details are still under development between California and our federal partners, it is a strong program that achieves real-world reductions and includes incentives to drive technology,” said Stanley Young, spokesman for the board.
Environmental groups are expected to meet with the White House on Wednesday morning.
During the weeks of talks, they had expressed concern that the slower rate of fuel efficiency improvements for light trucks might turn into a permanent loophole that erased benefits made by the car fleet.
Environmentalists also worried that a midterm review of the standards might let carmakers slip out of the stringent goals.
“Based on what we’re reading, there are certainly aspects that are encouraging and some things that could be troubling,” said Roland Hwang, transportation program director for the Natural Resources Defense Council. “It could go one way or the other. We need details.”
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