Calif. upholds Obama emissions rules, setting up clash with EPA over mpg targets

Editor's note: An earlier version of this story listed an incorrect surname for CARB engineer Pippin Mader.

RIVERSIDE, Calif. -- California approved light-vehicle pollution targets that the Trump administration has put on hold, setting up a potential face-off between federal and state regulators that could be expensive for automakers and a headache for consumers.

California Air Resources Board members criticized the auto industry for asking federal regulators to reconsider light-vehicle emissions targets for 2022-25 established by the Obama White House in 2012.

The board on Friday then finalized vehicle pollution rules for the state, set a mandate for zero-emission sales over the same time period, and ordered its staff to start work on emissions targets for after 2025.

California regulators have a long history of independent efforts to reduce tailpipe pollution from cars and light trucks, and Friday's move signals the state is prepared to fight the Trump administration.

“We’re going to press on,” Mary Nichols, head of the California Air Resources Board, said during a meeting of the agency here.

The state’s rules on greenhouse gas emissions for light vehicles were written in cooperation with the Obama administration and created a single national standard for new vehicles through 2025.

Targets for the share of California light-vehicle sales that need to be powered by battery, fuel cell or plug-in hybrid powertrains are set for 15 percent by 2025, from about 3 percent today.

CARB’s vote to continue down the path of stricter emissions rules could lead to a showdown with Trump, who described environmental regulations in the U.S. as “out of control” when meeting the CEOs of General Motors Co., Ford Motor Co. and Fiat Chrysler Automobiles NV in January.

Nichols chastised the industry for seeking the review of federal standards that Trump agreed to reopen earlier this month.

“What were you thinking when you threw yourselves on the mercy of the Trump administration to solve your problems?” Nichols said during the hearing Friday. “What did you mean when you said you don’t want to question the overall thrust of the standards? Why do another review if the current program is basically OK?”

Pruitt’s review

EPA Administrator Scott Pruitt plans to review the state’s legal authority to enforce its own limits on pollution and carbon dioxide emissions.

Myron Ebell, the former head of Trump’s EPA transition team, told Bloomberg News last week that Trump’s Transportation Department may determine only the National Highway Traffic Safety Administration can regulate fuel economy and exclude the EPA and California from such rule-making.

“We tried very hard not to provoke or defy the national government and we’ve had a good past with the EPA,” Nichols told reporters following the hearing. “I don’t expect there to be a war on California. I was obviously disappointed when I heard Pruitt commenting that he might reconsider the California waiver.”

The Alliance of Automobile Manufacturers said ahead of the CARB meeting that EV's share of overall demand for new light vehicles has been roughly flat for years. The trade group representing automakers including GM, Ford and Fiat Chrysler asked the regulator to wait at least two years before considering the higher zero-emission vehicle targets for 2030.

The alliance hasn’t asked Trump to revoke the state’s right to set its own emissions standards, Steven Douglas, the group’s senior director of environmental affairs, said during the CARB hearing.

California divide

Trump has reinstated a review of national greenhouse gas limits that run through 2025, which California had agreed in 2012 to accept as interchangeable with its own.

Pippin Mader, a CARB engineer, said the state may have to return to insisting on compliance with its own standards if the Trump administration dials back those at the national level.

As a result of Trump’s decision, the EPA and NHTSA will spend another year evaluating the federal standards that call for cars to average more than 50 miles per gallon by 2025.

CARB defended its cleaner-car targets Friday as a necessary component of its plan to cut greenhouse gas emissions to 40 percent below 1990 levels by 2030.

Matching states

Nine states including New York and New Jersey have pledged to adopt the Golden State’s targets. Zero-emission vehicles were 0.74 percent of sales in those nine states last year, according to IHS Markit. Automakers face penalties if they don’t meet the zero-emissions sales goals.

A provision that allows automakers to fulfill their obligations in New York and other matching states by selling cars in California is set to expire in October, putting pressure on automakers to increase zero-emission vehicle sales.

EV sales lag outside California because automakers barely advertise them there, and some don’t even sell certain models, according to Christine Kirby, acting assistant commissioner of the Massachusetts Department of Environmental Protection.

Most carmakers “have not tried to build the zero-emission vehicle market in the Northeast to the extent that is necessary,” she said.

Two tracks?

A two-track emissions regulatory system would leave consumers with potentially higher prices and could complicate their ability to move cars between states.

Board member Hector De La Torre compared a potential split between federal and state regulators to a divorce. "If a divorce is going to happen at some point, we are going to litigate that divorce strongly," he said.

A White House official, anticipating the California vote, told Reuters the Trump administration was committed to protecting jobs and providing consumers with affordable cars.

“We are disappointed that California has chosen to refuse our good-faith offer to work together with all relevant stakeholders on this important matter,” the person said.

California regulators said they would cooperate with federal regulators who are reviewing the federal tailpipe emissions standards. John Bozzella, president and CEO of the Global Automakers industry alliance, focused on the potential for cooperation, rather than the Board's criticism.

"I think we are where we want to be, which is working together," he said. "We're committed to a national program."

Reuters and Bloomberg contributed to this report.