President Trump Orders EPA Review of Corporate Average Fuel Economy Standards

20 March 2017 Dashboard Insights Blog

One of the more aggressive steps taken by the Obama administration to reduce carbon emissions was to have the EPA set an ambitious target for Corporate Average Fuel Economy (CAFE) standards: 54.5 miles per gallon by 2025.  In a release in the closing days of the administration, the EPA reaffirmed its commitment to this standard, citing the benefits of improved fuel economy versus the ability of automakers to hit these targets with manageable increases in vehicle costs.

The Trump administration has different ideas regarding these targets.  In a public announcement and an accompanying press release, President Trump announced that he would have the EPA re-review these CAFE standards, claiming that sticking to them would result in intolerable increases in vehicle costs and job losses in the automotive industry.  The announcements are striking in how they tie CAFE standards to industry jobs: one of President Trump’s core positions has been that he will work to keep American jobs and prevent job losses, whether as a result of regulation or outsourcing.  The press release itself puts side-by-side his announcement that CAFE standards would be reviewed, and an announcement that Ford, GM, and Fiat Chrysler had either created new jobs in the United States, or cancelled plans to open plants in Mexico.

Industry figures have not missed this connection.  Mark Fields, the CEO of Ford, claimed in a January meeting with the president that sticking to the Obama administration’s EPA targets would cost a million jobs (a claim that has been subject to some vigorous second guessing).  Industry figures will almost certainly continue to use this as a pressure point to try to keep CAFE standards more lenient going forward.  Given that President Trump did not exactly emphasize climate change as a problem during his campaign, and his appointment of Scott Pruitt (who just questioned the link between climate change and man-made greenhouse gases) to head the EPA, an agency that Pruitt had sued several times as the Oklahoma Attorney General, there will likely not be much pushback on this pressure.

Ultimately, while new standards have not yet been released, the smart money is on CAFE standards being substantially relaxed under this administration.  The EPA and Department of Transportation have announced that the EPA will make its final determination on the appropriateness of the standards for 2022-25 by April 1, 2018, and this is a date that plenty of manufacturers and suppliers worldwide will have circled on their calendar.

This blog is made available by Foley & Lardner LLP (“Foley” or “the Firm”) for informational purposes only. It is not meant to convey the Firm’s legal position on behalf of any client, nor is it intended to convey specific legal advice. Any opinions expressed in this article do not necessarily reflect the views of Foley & Lardner LLP, its partners, or its clients. Accordingly, do not act upon this information without seeking counsel from a licensed attorney. This blog is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Communicating with Foley through this website by email, blog post, or otherwise, does not create an attorney-client relationship for any legal matter. Therefore, any communication or material you transmit to Foley through this blog, whether by email, blog post or any other manner, will not be treated as confidential or proprietary. The information on this blog is published “AS IS” and is not guaranteed to be complete, accurate, and or up-to-date. Foley makes no representations or warranties of any kind, express or implied, as to the operation or content of the site. Foley expressly disclaims all other guarantees, warranties, conditions and representations of any kind, either express or implied, whether arising under any statute, law, commercial use or otherwise, including implied warranties of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Foley or any of its partners, officers, employees, agents or affiliates be liable, directly or indirectly, under any theory of law (contract, tort, negligence or otherwise), to you or anyone else, for any claims, losses or damages, direct, indirect special, incidental, punitive or consequential, resulting from or occasioned by the creation, use of or reliance on this site (including information and other content) or any third party websites or the information, resources or material accessed through any such websites. In some jurisdictions, the contents of this blog may be considered Attorney Advertising. If applicable, please note that prior results do not guarantee a similar outcome. Photographs are for dramatization purposes only and may include models. Likenesses do not necessarily imply current client, partnership or employee status.

Related Services